IMA Urges Europe To Delay IFRS Adoption

by Robert Lee, Tax-News.com, London

21 March 2007

The UK Investment Management Association (IMA) has written to the European Commission asking it to defer adopting the International Accounting Standards Board's International Financial Reporting Standards (IFRS).

IFRS has been the subject of much debate recently, due to moves to converge international and US accounting standards. In introducing IFRS 8, which is based on the US's equivalent standard, the IMA said that the EU is converging requirements for the disclosure of segmental information with those of the US, at a time when there are still unresolved issues with the converged US/IFRS framework following the IASB's discussion paper on the conceptual framework last year.

The IMA said that furthermore, one of the main aims of converging IFRS with US Generally Accepted Accounting Principles (GAAP) is to eliminate the need for the burdensome US GAAP/IFRS reconciliation that companies with a joint listing in both America and another country are required to prepare at great cost. However, as IFRS 8 only relates to disclosures in the notes, it does not impact on this.

Liz Murrall, Senior Corporate Governance Adviser of the IMA commented:

"IMA does not consider that converging requirements for segmental disclosures should be a high priority for the Commission."

"In adopting IFRS 8, the Commission would be rushing ahead with an unnecessary and imperfect standard. We urge the Commission to take on board our concerns and hold off introducing IFRS 8 until there is more of a consensus about the converged framework."

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