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Accounting for Europe’s Economy and Society: Considerations for Financial Stability, Economic Development and the Public Good

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  • Biondi Yuri

    (Cnrs – IRISSO (UMR7170, University Paris Dauphine PSL), and Labex ReFi, Paris, France)

Abstract

International accounting convergence led by the International Accounting Standards Board (IASB) has been fostering an accounting revolution by introducing a market basis of accounting. This accounting model makes general reference to current values (mark-to-market, fair value) instead of corporate realised revenues and invested costs, which were central to the previous model (historical cost). This accounting revolution was consistent with the global financial architecture based upon transnational financial markets which was established since the seventies. However, among the main jurisdictions and monetary areas worldwide, only Europe has adopted the international accounting standards (IAS-IFRS), substantially delegating its accounting legislative and regulatory process to the IASB. This delegation has been raising major quarrels with European constituencies, including (i) resistance against the (full) fair value measurement of financial instruments (2003-05); (ii) opposition to amendment of IAS on segment reporting (2006); (iii) forced suspension of fair value measurements and impairments amid the North-Atlantic financial crisis (October 2008); (iv) an institutional conflict over the evaluation of distressed Member States’ sovereign bonds (August 2011). The Maystadt Report of 2013 reviewed and summarised these concerns with both the accounting model, and the governance of Europe’s accounting standards-making. It recommended including further considerations for Europe’s financial stability and public good, while it did consider the option to establish an Accounting Standards Board of Europe.

Suggested Citation

  • Biondi Yuri, 2017. "Accounting for Europe’s Economy and Society: Considerations for Financial Stability, Economic Development and the Public Good," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 7(2), pages 65-77, July.
    • Handle: RePEc:bpj:aelcon:v:7:y:2017:i:2:p:65-77:n:14
    DOI: 10.1515/ael-2017-0018
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    References listed on IDEAS

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    1. Biondi Yuri, 2012. "What Do Shareholders Do? Accounting, Ownership and the Theory of the Firm: Implications for Corporate Governance and Reporting," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 2(2), pages 1-29, June.
    2. Yuri Biondi & Vincent Bignon & Xavier Ragot, 2004. "An economic analysis of fair value : the evolution of accounting principles in European Legislation," Post-Print halshs-00203363, HAL.
    3. Yuri Biondi & Pierpaolo Giannoccolo, 2015. "Share price formation, market exuberance and financial stability under alternative accounting regimes," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 10(2), pages 333-362, October.
    4. Larry Bensimhon & Yuri Biondi, 2013. "Financial Bubbles, Common Knowledge and Alternative Accounting Regimes: An Experimental Analysis of Artificial Spot Security Markets," The Japanese Accounting Review, Research Institute for Economics & Business Administration, Kobe University, vol. 3, pages 21-59, December.
    5. Yuri Biondi, 2005. "The firm as an Entity: Management, Organization, Accounting," Post-Print halshs-00203036, HAL.
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