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ARTICLE · 08 DECEMBER 2005

Securities and Banking Update – December 2005

The ISAB’s desire to implement fair value accounting for financial instruments has faced controversy and complaint and seemed likely to be watered down when it was drawn into the realms of EU politics. Now however, fairness is back and thanks to the IASB’s background efforts it doesn’t look much different.

United KingdomStrategy

Pilgrim’s progress – the road to fairness 

The ISAB’s desire to implement fair value accounting for financial instruments has faced controversy and complaint and seemed likely to be watered down when it was drawn into the realms of EU politics. Now however, fairness is back and thanks to the IASB’s background efforts it doesn’t look much different. Rolf Stromsoe charts the progress of the fair value option. After months as the ultimate accounting hot potato, the excitement surrounding the IASB’s fair value option for financial instruments has finally subsided. On 16 June an amendment to IAS 39 was published restricting the circumstances in which companies can measure financial instruments at fair value. The amendment is a stop-gap measure and it fails to solve a number of problems with fair value accounting but it has resulted in an uneasy ceasefire in a heated accounting battle. 

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