Members of the European Parliament are set to vote on a highly critical review of the performance of the International Financial Reporting Standards Foundation (IFRS).
The Parliament’s Economic and Monetary Affairs Committee (ECON) approved a draft of the report at a sitting on 27 April. The motion will now go forward to a plenary sitting of the Parliament for a final vote.
Speaking after the 27 April vote, Green Party MEP and leading IFRS critic Sven Giegold said: “The message of the MEPs is clear: We are not just letting others decide on new standards. The European Parliament needs to be included when new standards are negotiated.
International Accounting Standards Board (IASB) chairman Hans Hoogervorst has in the past warned that the Parliament was “getting out of hand”.
The strongly worded resolution argues that the IFRS accounting model is incompatible with European law. It also argues that the IASB’s new financial instruments accounting standard, IFRS 9, fails to promote financial stability. Finally, the MEPs have demanded a greater role for the Parliament in the standard-setting process.
IPE reported in March that the chairman of the European Systemic Risk Board, Mario Draghi, conceded his board did not yet understand the financial-stability impact of IFRS 9.
If the EU endorses the standard, it would apply to accounting periods beginning on or after 1 January 2018.
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