Volcker Tells EU of Proposed IASCF Constitutional Reforms

On Feb. 25, 2005, International Accounting Standards Committee Foundation (IASCF) Chairman Paul Volcker made a speech to the European Union's Accounting Regulatory Committee (ARC), summarizing the current status of proposed reforms to the IASCF Constitution. The constitutional reforms would affect the composition and operation of the IASCF and the International Accounting Standards Board (IASB) it oversees. Among key points were that:

• Composition of boards: although EU was seeking greater representation on the IASCF and IASB Boards, they already hold 5 of 14 seats on IASCF (same number as from U.S.) and 7 of 19 seats on IASB (more than U.S.); Volcker acknowledged EU's action requiring adoption of International Accounting Standards (IAS's), but said that did not logically lead to conclusion to overweight the above boards with EU representation, due to the need to converge with other rules (such as U.S.).
• Earlier consultation by IASB: the IASB Board will consult more fully with representative groups in the early stages of formulating its ideas in particularly complex and difficult areas.
• Increase voting requirement to ensure broader consensus: stronger majority of votes would be required on IASB voting matters by changing from requiring a simple majority to requiring nine votes of fourteen, to assure that IASB's decisions reflect a broad consensus.

A press release summarizing Mr. Volcker's remarks is available here and the full text of his speech is available here.

Other IASB news

IASB announces March 16 public roundtable and releases related draft proposal that would amend IAS 39 for "The Fair Value Option."

Three New Trustees Replace outgoing Trustees on IASCF

Prepared Feb. 25, 2005 by Edith Orenstein (eorenstein@fei.org), Manager of Research, Financial Executives Research Foundation (FERF). This summary does not represent FEI opinion, unless specifically noted above.