Brussels (Sept. 30, 2003) -- The European Commission formally adopted International Accounting Standards for nearly 7,000 European Union listed firms but postponed a decision on rules for derivatives.
The new standards will be effective as of January 2005, and were put in place in part to avoid scandals similar to Enron and WorldCom taking place overseas, the Commission said Monday.
One sticking point was deciding on two rules, IAS 32 and 39, which require derivatives, or hedges, to be shown at market value. These rules are currently being revised by the standard-setting International Accounting Standards Board.
The banking industry opposed the initial rules, which they said would lead to higher costs and volatility of earnings and balance sheets, forcing the IASB to re-examine them.
"I encourage the IASB and interested parties to conclude their dialogue on IAS 32 and 29 so that the Commission will be in a position to consider these standards, too, in time for 2005," European Internal Market Commissioner Frits Bolkestein, in charge of the issue, said in a statement.
-- WebCPA staff
