ACT calls for scrapping of derivatives accounting standard Fred 23

The UK’s Accounting Standards Board, which is developing the standard in response to concerns that there is little knowledge on how to account for derivatives, is accepting comments on Fred 23 until September 16.Instead of adopting a new UK accounting standard, the ACT said treasurers should move directly to adopt international derivatives accounting standard IAS 39 from 2004. “It doesn’t make any sense to start implementing Fred 23 in early 2003 over a six-month period, when UK treasurers, along with their European counterparts, will then have to adopt IAS 39 from 2004,” Richard Raeburn, ACT chief executive, told RiskNews.

A requirement to apply Fred 23, closely followed by IAS 39, could have a damaging effect on perceptions of the accounting profession, Raeburn claimed.

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