The new reporting agenda for financial instruments | Bangkok Post: business

LEADING THE WAY

The recent financial crisis is generally perceived to have been related to certain types of financial instruments with complex structures, such as collateralised debt obligations and credit default swaps, held by financial institutions. Further highlighting the complexity of the accounting standard for financial instruments (IAS39), financial statement users and other stakeholders have said that the standard is too difficult to fully comprehend.

Sir David Tweedie, chairman of the International Accounting Standards Board (IASB), acknowledged the concerns with the following dry assessment: "Those of you who have read the standard on financial instruments (IAS 39) and understood it, have not read it properly."

As a result, a complete overhaul of financial reporting standards for financial instruments is now on the global agenda. The aim is to replace IAS39 with IFRS9 by June 2011.