The European Commission has adopted amendments to accounting standards with the unanimous support of the EU Member States. The amendments to International Accounting Standard (IAS) 39 introduce the possibility of reclassifications for companies applying International Financial Reporting Standards (IFRS), which were already permitted under US Generally Accepted Accounting Principles (GAAP) in rare circumstances. The amendments to IFRS 7 introduce additional disclosure requirements linked to these reclassifications in order to ensure full transparency for users of financial statements.
The changes to the accounting standards are intended to mitigate the consequences of the recent turbulence in financial markets. These amendments provide EU companies with the same flexibility as their US competitors in reclassifying assets held-for-trading into the held-to-maturity category, while avoiding any distortion of treatment between US and European banks. The changes apply as of the third quarter of 2008 (starting after 1 July 2008).