Hedge Accounting: 'Drop FRED23 And Move Straight To IAS39', ACT Urges ASB
The Technical Committee of the Association of Corporate Treasurers said it supported an orderly transition from existing UK standards to international accounting standards. ‘It is for this very reason that the ACT believes the best interests of UK listed companies would be served through FRED23 not being applied and for companies to move direct to IAS39 in accordance with the European timetable rather than that proposed by FRED23’, it said. In its response to the Accounting Standards Board (ASB), the ACT states that it does not ‘see any sense’ in listed companies implementing FRED23 when the implementation of IAS39 will follow on so soon afterwards. If FRED23 were issued in January 2003, there would be at least a six-month period before its adoption, in say July 2003. Listed companies will need to have made preparations for the implementation of IAS39 from 2004. Therefore, for listed companies, the ACT believes that it is more logical to move straight to IAS39 implementation, rather than to adopt FRED23 approximately six months earlier.