International Accounting Standards Board
(IASB) chair David Tweedie has told European finance ministers the
board will stick to its current plans to address impairment and
reclassification out of fair value rules as part of a comprehensive
review of IAS 39. Initial reports indicate the ministers have
accepted this assurance.

Tweedie was called before a European Union
Council of Economic and Financial Affairs (Ecofin) meeting in
Luxembourg this month to explain how the IASB is addressing what
Ecofin called “potential competitive distortions generated by
recent changes in US accounting regulation”.

The US Financial Accounting Standards Board
(FASB) rushed through changes to US GAAP, relating to fair value
accounting and recognition of impairment losses on financial
assets, in April. Ecofin said the changes raised concerns about
possible distortions to the level playing field for European
entities and questioned why the IASB would not follow the FASB’s
lead in making rushed changes.

Tweedie told Ecofin that the IASB has already
sped up and restructured its review of IAS 39 in response to
European concerns.

The section of IAS 39 that addresses
classification, measurement and related impairment issues is being
addressed first. An exposure draft on this section will be released
in July and a final standard will be ready for use for 2009
financial statements.

Tweedie told Ecofin that this approach is
superior to the option of adopting the FASB staff position on
impairment because the IASB’s work on impairment directly addresses
the specific nature of EU concerns.