IASB Gets Some Backup Defending Their Turf Against France and Germany

Yesterday we brought up how some German and French insurance were less than cool with the new proposals put forth by the IASB that would make everybody's favorite valuation method, mark-to-market, pretty much mandatory on any investment that isn't a fixed income security (read: that's lots of stuff).

The Finance Ministers of those countries, on behalf of said insurance companies, decided to write a very cordial letter that probably went something like this:

IASB,

We're writing to inform you that the proposals you put out totally suck and you need to move up the review process so they can write more letters that will reiterate how MTM sucks and we're going to continue to write to you about it until we get our way, goddamnit. I think you know how we deal with things in France when we don't get our way and Germany, well, we won't go there.

Peace,

French and German Finance Ministers

Which caused the two professional accounting associations in Europe, the Institute of Chartered Accountants in English and Wales (ICAEW) and the Chartered Institute of Management Accountants (CIMA) to retort with:

Dear French and German Finance Ministers,

First: You guys are talking after the whole WWII thing? France, especially you...whatevs...

Second: BTFO of the IASB's biznass.

Late,

ICAEW & CIMA

'Hands off the IASB,' say institutes [Accountancy Age] Sphere: Related Content

Mark-to-Market Still Unpopular with Companies That Aren't Interested in Reality

Because we know that you were worried that the mark-to-market debate was dead...FEAR NOT. The IASB released proposed amendments to IAS 39 yesterday that will get more than a few companies bent out of shape. The first being French and German insurance companies that are threatening to dump asstons of securities if the amendments are passed.

The long/short of the amendments is that securities would be thrown into one of two groups. Group 1 would be marked-to-market, Group 2 would be held at amortized cost (English Translation: what you paid for it less periodic non-cash reductions).

SHOCKER: the insurance companies don't like Group 1. John Carney at Clusterstock provides the details on the insurance companies' temper tantrum argument:

The German insurers have said this rule would require them to dump the stocks they hold in their portfolio, since the effects of market volatility on their capital position would be unbearable. So far the finance ministers of Germany and France support the insurers, who are calling for softer, more flexible rules. The European Commission is reportedly supporting the IASB.

Sigh.

European Insurers Threaten To Dump Stocks And CDOs Under New Mark-To-Market Rules [Clusterstock]

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IASB: We're Almost Done. We're So Close. Just Wait a Little Longer

In keeping with the rich tradition of accounting regulators taking reactionary measures, Sir David Tweedie, the Chairman of the International Accounting Standards Board (IASB), has said that the Board will be out with its response to the financial crisis by the end of the year.

"Speaking at a meeting for European Union finance ministers in Luxembourg he conceded that 'we have to do a better job of keeping you abreast of our response to the crisis.'"

Response to the crisis? THE CRISIS IS OVER. We're just wallowing in the rubble right now and you're going to respond to it by the end of the year?

Don't you love how accounting regulators move with sloth-like speed whenever everyone is drenched in financial catastrophe poo? They're basically living by the mantra, "There is no problem, until there is a problem, and we don't cause problems".

By the time they respond, we'll all be speculating on real estate again.

IASB 'on track' with crisis response [AccountancyAge] Sphere: Related Content

IASB Attempting to Start a Hip Hop-esque Fued with the FASB

Hip hop feuds. What would our ubiquitous pop culture world be without them? Well, thank all that is good and holy that now the accounting world has its own version.

John Smith (who is obviously upset about being left out of the This American Life episode) is calling out the United States from way over in Europe, in his dorky bean counter version of a dis song:

"If it doesn't adopt," [Smith] warned, the United States "will be the outlier and those countries already adopting and committing themselves to IFRSs will not accept a situation where the United States remains outside the system indefinitely, yet has a seat at the table."

Whoa. This is striking similar rhetoric to the old East Coast-West Coast days if you ask me. It's clearly a verbal retaliation to Bob Herz's earlier statement, and Smith is bringing it HEAVY. Words like "outlier" and "will not accept a situation" are obviously not going to sit well with his FASB rivals.

It strikes me that the evangelicalism of IFRS is still alive over in the EU while Team America, FUCK YEAH! is not too welcoming of the accounting "good news".

As you were.

U.S. "Will Be The Outlier" Without IFRS [CFO] Sphere: Related Content