A ameaça as normas contábeis

Europe poses threat to global accounting rules

By Jennifer Hughes in London and Nikki Tait in Brussels

Financial Times – 17/10/2008 – Asia Ed1 – 17

Growing pressure on the International Accounting Standards Board could lead Europe into developing its own regional rulemaker, in a move that would kill off the long-running effort to develop a single set of global accounting rules.

The IASB this week gave into pressure from the -European Union and eased its rules on fair value accounting, but an EU-wide meeting next week could see it presented with a “wish list” of further demands to which it could not accede.

Some fear that any -resulting stand-off between the two bodies could allow groups hostile to the IASB’s accounting rules to call for a European standard setter instead of the IASB.

The IASB sets accounting rules for more than 100 countries, including those under the EU umbrella.

There is thought to be -support among the French and Italian financial -communities for such a move, but it is opposed by some of the world’s biggest banks, including HSBC.

“It is absolutely essential that there is a single body of international accounting standard setters. It would be a considerable step backwards and most regrettable if we went to regional rules just as convergence on a single global set of standards is looking like a reality,” said Douglas Flint, chief financial officer of HSBC.

The wish list compiled at the EU meeting is likely to cover a series of issues linked to fair value accounting, the controversial process whereby financial institutions have to mark most of their assets at market prices. These have plunged as a result of the credit crunch, forcing many banks into losses and undermining the capital reported on their balance sheets.

The danger for the IASB is that the list will contain requests, such as rule changes, that it has already dismissed and cannot re-visit without damaging its credibility.

Banks are seeking further clarification over this week’s rule changes, which will allow some to shift holdings from fair value to amortised cost, a treatment that would smooth out market volatility. They are also likely to ask to be able similarly to shift assets containing embedded derivatives.

“Without trying to cause a problem the IASB may not be able to deliver what is asked because it would be severely criticised for both giving in and producing bad accounting standards,” warned Peter Wyman, a partner at PwC.

The European Banking Federation was emphatic that it would like further changes to be initiated by the international standard-setter. However, pressure could still be applied by the threat of an EU carve-out. However, the Commission can only remove parts of the rules, not add new clauses.

“We could then have a situation in Europe, in this most critical year-end period, where we would have in effect only a limited standard on financial instruments and an accounting free-for-all,” said Mr Wyman, who warned a carve out could make accounts far harder to compare by limiting the guidance available.