For Immediate Release Thursday,
September 6, 2001
For More
Information, Please Contact:
Stacy Carey,
ISDA New York, (212) 332-1200; Fax (212) 332-1212; scarey@isda.org
NEW YORK, Thursday,
September 6, 2001 – The International Swaps and Derivatives Association (ISDA) yesterday
filed comments on the Draft Standard “Financial Instruments and Similar
Items,” proposed by the Joint Working Group of Standard Setters (“JWG”). The full text of the
response is accessible on ISDA’s web site: www.isda.org
“ISDA welcomes the JWG’s initiative in seeking to achieve comparability in the accounting treatment of financial instruments and recognises the publication of the Draft Standard as an important step in that process. However, our Committee strongly agreed that a fair value model based on guidance contained in the draft standard would be significantly flawed,” said Robin Doyle, Vice President, JPMorgan Chase and Chair of ISDA’s North American Accounting Committee.
The draft standard, issued in December of last
year, represents the views of the JWG members, who are representatives or
members of accounting standard setters or professional organisations in 10
jurisdictions. The primary objective of
the draft standard is to reflect in the balance sheet and income statement the
effect of market events on the fair value of an enterprise’s financial
instruments, and similar items, in the periods in which these events occur.
“In addition to comments on the technical aspects of the document, ISDA is also concerned that the sheer volume of material covered in this draft resulted in a flawed consultation process. Addressing the issues through smaller, more focused projects would allow for a better assessment of the impact of implementation,” said Rob Stevens, Managing Director, CSFB and ISDA’s European Accounting Committee Chairman. ISDA recommended the development of separate projects on measurement, recognition and derecognition, liabilities vs. equity, hedging and consolidation.