GLOBAL - The International Accounting Standards Board (IASB) has issued amendments to the Financial Instruments: Recognition and Measurement (IAS 39) and Financial Instruments: Disclosures (IFRS 7) to permit the reclassification of some financial instruments.
This action will enable companies reporting according to IFRS to use the reclassification amendments from 1 July 2008.
Sir David Tweedie, chairman of the IASB, said: "In addressing the rare circumstances of the current credit crisis, the IASB is committed to taking urgent action to ensure that transparency and confidence are restored to financial markets.
"The IASB has acted quickly to address the concerns raised by EU leaders and others regarding the issue of reclassification.
"Our response is consistent with the request made by European leaders and finance ministers; it is important that these amendments are permitted for use rapidly and without modification."
The IASB said it noted the concern expressed by EU leaders and finance ministers through the Economic and Financial Affairs (ECOFIN) Council to ensure that 'European financial institutions are not disadvantaged vis-à-vis their international competitors in terms of accounting rules and of their interpretation'.
It concluded these amendments addressed the desire to reduce differences between IFRSs and US GAAP in a manner that produced high quality financial information for investors across the global capital markets.
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