FRC chief executive stands down…
CESR report reveals limited fair value
Obama adviser calls for rethink to fair value
FRC chief executive stands
The UK Financial Reporting Council (FRC) is searching for a new
chief executive after Paul Boyle announced plans to stand down.
FRC chair Christopher Hogg said he had been aware that Boyle was
likely to want to move on after five years as chief executive but
was sorry he was leaving. Boyle has served as chief executive of
the regulator since it was restructured in early 2004. Prior to
that he was chief operating officer of the UK Financial Services
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CESR report reveals limited fair
Most European financial companies did not apply the recent
amendments to IAS 39 allowing the reclassification of some
financial instruments when preparing their third-quarter 2008
interim financial statements, according to a report from the
Committee of European Securities Regulators (CESR).
CESR analysed the reports of the 22 financial companies that
appear in the FTSE Eurotop 100 index, plus reports from 78 other
companies. More than half of the companies did not reclassify any
financial instruments in their third quarter 2008 financial
Most of the companies that used the option reclassified from the
category of fair value through profit and loss to loans and
The regulator predicted the year-end results will contain far
more detailed information explaining the basis on which the
accounting policy has been changed, the effect of that change and
any key assumptions that have been made.
FAIR VALUE ACCOUNTING
Obama adviser calls for
rethink to fair value accounting
Fair value accounting principles have been criticised in a
report from international consultancy organisation the Group of
Thirty. Financial Reform: A Framework for Financial Stability was
produced by a steering committee led by Paul Volcker, a key
economic adviser of US President Barack Obama.
One recommendation is that fair value accounting principles and
standards should be re-evaluated to develop more realistic
guidelines for dealing with less liquid instruments and distressed
markets. It calls for the development of principles-based standards
that better reflect the business model of regulated financial
institutions, apply appropriate rigour to valuation and require
improved disclosure and transparency.