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ICAEW calls for fast track IFRS endorsement

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24th Nov 2005
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Eric Anstee, chief executive of the Institute of Chartered Accountants of England & Wales (ICAEW) has called for the European Union to accelerate the process for endorsing IFRS standards and amendments relevant for 2005.

In a speech to a Brussels seminar this week, Anstee warned that companies could be put in the position of inadvertently misleading analysts and investors, unless all outstanding standards and amendments relevant for 2005 complete their way through the EU process before early January.

"I think we need to review how realistic a prospect this is," said Anstee. "The process can take up to 10 months, much of which is caused by the need to translate each standard into all official EU languages.

"The situation is being made more desperate by the new breed of IASB pronouncements called 'technical corrections'. Take for instance, the corrections to IAS 21 (The effects of changes in foreign exchange rates). Those corrections are not yet final and the IASB is considering responses. But if this is not passed into EU law by January, the effect will be that some companies will have amounts reported in income that would otherwise have been reported in equity, potentially distorting profits and thus performance assessments. A very fast track is needed to allow final Technical Corrections to be incorporated into law."

Anstee also raised the subject of fair values and what that means for analysts and investors in how they interpret accounts. He said that more work needed to be done on the impact of fair values on specific sectors to reduce the potential for shocks in accounts.

The full text of Anstee's speech can be downloaded from the ICAEW website.

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