IASB agrees to revise fair value rules for year-end under pressure
Financial Crisis Advisory Group warns pressure could lead to tragedy
The International Accounting Standards Board (IASB) has agreed to revise its fair value rule faster so it takes effect by year end, after facing pressure from the European Union (EU).
The European finance ministers threatened to create their own accounting standards, arguing that recent changes to U.S. standards have created an unlevel playing field.
The IASB sets the accounting rules used in more than 100 countries and has been working with FASB to develop a global set of accounting standards. The IASB plans to split revision of its IAS39 fair value rule into three parts, starting with classification and measurement in July.
“We desire to get to a common good answer with the IASB and we will make best efforts to do so, but some of the directions we are currently headed in are not to the liking of our board,” FASB Chairman Robert Herz said at last week’s meeting of the Financial Crisis Advisory Group (FCAG), a joint body of FASB and the IASB.
FCAG members warned that continued pressure on FASB and the IASB could result in tragedy.
FCAG Co-chair Harvey Goldschmid, former SEC commissioner, said, “the pressure on the two standard-setters has created more than a crisis, and for the IASB in particular, a threat to the very existence of international accounting standards.”
Goldschmid invited the two chairs – Herz and the IASB Chairman Sir David Tweedie – to update the advisory group on developments since their last meeting.
“We will work out a model, FASB will work out a model, and we will try to bring them together and then decide can we take one or the other or a mixture,” Tweedie said. “If we can't agree, we will put both out.”
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LAST UPDATED 5/27/2009