Fair-value accounting rule eased by EU

News Article - 17 October 2008
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The European Union (EU) has relaxed a fair-value accounting rule in an attempt to alleviate the recent problems in the financial markets and improve business health.

According to the European Commission (EC), companies in the bloc will now be as flexible as firms in the USA in terms of reclassifying assets from held-for-trading to held-for-maturity.

The change was approved by the EC and the European Parliament on Wednesday (October 15th) and was in response to a request from the ECOFIN Council on October 7th.

"I commend the European Parliament and the Member States in the Council without whose excellent cooperation, this would not have been possible," said Charlie McCreevy, internal market commissioner.

"This shows once again that the EU is responding quickly and decisively to the current financial turbulence."

The changes come into effect as of the third quarter of 2008.

Shares in European stock markets have been performing well so far today (October 17th), with the FTSE 100 up 3.9 per cent at one point in early trading.

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