IASC APPROVES STANDARD ON FINANCIAL INSTRUMENTS--LAST MAJOR PROJECT ON CORE PROGRAM
The board of the International Accounting Standards Committee (IASC) in late December approved the first international accounting standard to deal with the recognition and measurement of all financial instruments. In approving IAS 39, Financial Instruments: Recognition and Measurement, IASC completed the last major project on a work program agreed upon in 1995 with the International Organization of Securities Commissions (IOSCO). The work program called on IASC to complete a comprehensive core set of standards.
The IASC board voted 12-1, with three abstentions, on the proposal (E62). A supermajority of 12 out of the 16 voting delegations of the board is needed to advance draft standards to final rule status. Each delegation comprises two people, but has a single vote. The Australian delegation voted against the proposal. The U.S. delegation was among the three that abstained from voting on the financial instruments rules, according to a Bureau of National Affairs reporter. The remaining abstentions came from the United Kingdom and France.
IASC Chairman Stig Enevoldsen welcomed the completion of IAS 39. "The approval of the final major standard on the IOSCO work program of core standards is an event of historic importance to users and preparers of financial statements and will lead to real progress in accounting worldwide," he said. "Recent events in the world's financial markets have shown the need for immediate improvements in accounting around the world. Our core standards will provide that improvement. Our standards now provide a comprehensive basis of accounting. They are of high quality--that is, they will result in transparency and comparability and they provide for full disclosure.
"By finalizing our core standards, we have lived up to the commitment we made to IOSCO in 1995," Enevoldsen continued. "It is now up to IOSCO to carry out a timely review of the core standards, so that IOSCO can consider endorsing international accounting standards for cross-border capital raising and listing in all global markets."
The approval of IAS 39 marks an important milestone in accounting for financial instruments, a subject that IASC has been considering since 1989. Although various national standard setters have issued standards covering various aspects of accounting for financial instruments, IAS 39 is the first standard issued by any standard setter that deals with all financial instruments.
"Although IAS 39 should bring about a substantial improvement in accounting for financial instruments, we recognize the need for further development," said Sir Bryan Carsberg, IASC secretary general. "The board is participating in an international joint working group that is exploring the feasibility of fair valuing all financial assets and financial liabilities."
"The core standards will give major companies all over the world the opportunity to adopt the same accounting, which is certainly a unique and historic opportunity for convergence towards one accounting language," Enevoldsen said. "I urge the world to seize this historic opportunity." *
IASC BOARD VOTES TO OPEN MEETINGS
The board of the International Accounting Standards Committee (IASC) has decided to open its meetings to the public. The first open meeting is scheduled for March 13-19, 1999, in Washington, D.C., and will be organized by the AICPA.
Ending the practice of closed meetings was urged by the U.S. delegation to the IASC board, along with support from the SEC and FASB. FASB has held open meetings since it began rule making in 1973. The IASC can be contacted at email@example.com *
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