Accounting *yawn*. But how about accounting in German?
We are getting the first industry reactions to the IASB’s proposals to reform IAS 39, the accounting standard which sets out how to value financial instruments under IFRS, among other things. And the reactions appear to be largely in the negative. And are coming out of Germany.
From FT Deutschland, with FT Alphaville’s own, clumsy German translation:
The international accounting board the IASB’s proposals for changed rules on the valuation of securities have met with criticism from the banks and insurers. IASB chairman David Tweedie explained that simplification of the rules is the ultimate goal.
….
Banks and insurers want – with the German finance minister and France’s on their side — not simplified rules, but a relief of their financial statements. In insurance circles it means the outline announced on Tuesday has garnered criticism. “If it stays the same, insurers will withdraw from the shares ” said an expert.
The crux of the insurers’ argument is that if they have to value stocks and certain structured products at fair value — mark-to-market prices — they’ll be more exposed to market volatility. Hence they appear to be threatening to dump shares and structured stuff onto the market because of the proposals.
But who will blink in yet another mark-to-market battle?
Related links:
The IASB does fair value - FT Alphaville
IASB promotes ‘fair value’ rule change – FT
IASB sticks to its fair value guns: Margaret Doyle – Reuters