IFRS 'leading to accounting misinterpretations'

News Article - 24 October 2006
Category:

Last year's introduction of financial assessment standards has led to differences of interpretation between banks when calculating their equity figures, it has been claimed.

The comments accompany the impending publication of a new study into the effect of International Financial Reporting Standards (IFRS) regulations from accountancy firm Ernst & Young, entitled The Impact of IFRS on European Banks.

The research concentrates on the ramifications of the legislation for 24 large European banks.

For instance, Barclays has reported a 12 per cent decline in the value of its equity since following the standards, while Groupes Banques Populaire reported a rise of 22 per cent.

Tony Clifford, partner and IFRS banking specialist at Ernst & Young, attributed these large deviations in part to differences in interpretation of the regulations.

"Although all 24 banks have been reporting under the same standards, the number of options available, difference in interpretation where standards are not clear and the involvement by national regulators means that the presented numbers vary considerably," said Mr Clifford.

Ernst & Young is one of the traditional four largest accountancy firms, along with PricewaterhouseCoopers, KPMG and Deloitte & Touche.

Article keywords:

---

More industry news

• Think tank warns UK may have already slipped back into recession
• Growing demand for HR staff in technology and international sectors
• Boosting business growth a ‘priority’ to avoid Eurozone slowdown
• HMRC launches alternative disputes pilot scheme this week
• December employment statistics disregard gloomy recruitment predictions
• Eurozone manufacturing PMI shows modest improvement
• UK scores highly for economic governance by ratings agency
• Government launches two-year project focusing on manufacturing sector
• Burden of regulation on UK businesses ‘too high’

Back to news home page »