The Trustees of the International Accounting Standards Committee Foundation gave the International Accounting Standards Board the go-ahead to suspend due process rules in order to accelerate their response to the credit crisis.
At a meeting in Beijing, the trustees supported the IASB's plans to seek appropriate language to eliminate any differences in how International Financial Reporting Standards and U.S. generally accepted accounting principles address the issue of reclassification of financial instruments. The trustees support the IASB's intention to complete this work by the end of the week.
The trustees, as the IASB's oversight body, have agreed that the IASB can suspend its normal due process. That will permit any IASB decision on reclassification made this week to take effect for the third quarter.
The IASB plans to work speedily with the U.S. Financial Accounting Standards Board to ensure that their guidance is equivalent and therefore has the same effect across borders (see Accounting Boards Respond to Credit Crisis). The objective would be to create a level playing field for those companies applying IFRS and those using U.S. GAAP.
Such a position would be in line with and supportive of the statements of European leaders, and finance ministers through the Economic and Financial Affairs Council, to ensure that "European financial institutions are not disadvantaged vis-à-vis their international competitors in terms of accounting rules and of their interpretation."
The trustees said they are concerned that any moves to go now beyond the positions taken by European leaders and the finance ministers in the Ecofin Council would result in the creation of a new unlevel playing field.
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