26 July 2006

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Business Today

No new accounting rules until 2009

The International Accounting Standards Board has announced that it shall not mandate any new International Financial Reporting Standards before 2009.
The decision also affects the local scene since in Malta, the Audited Financial Statements are prepared within the parameters set by no less than 41 International Accounting Standards.
The news that no further new rules will become mandatory for a moratorium period of three years is welcome news for financial statement preparers and investors. At times the new application or revision of accounting rules necessitated adjustment in financial statements of the previous year being published with the current year.
This is done for comparative purposes. Moreover, certain European countries have started to apply international accounting standards as against generally accepted accounting principles of a particular country only in 2005.
This was the project set by the European Union to harmonize accounting standards within its member states. This moratorium will also serve to give time to these countries to settle in applying the IASs.
It is expected that new accounting standards will still be published and major amendments of existing standards will still be issued however companies will not be obliged to apply them but follow them only on a voluntary basis before 2009.
This moratorium should also serve so that the joint work programme on accounting standards undertaken by the International Accounting Standards Board and the US Financial Accounting Standards Board continues to be followed up as agreed in the memorandum of understanding published by both organisations in February 2006. The possibility that all companies quoted on worldwide Stock Exchanges will report under the same accounting rules may one day become a reality.

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