Fair value accounting : Regulators point of view

[eng] The European Commission's decision to require the use of IAS for the preparation of the consolidated financial statements of listed companies is motivated by the desire to improve the comparability of financial statements and to achieve a level playing field. However, it raises a number of issues of principle, and some major practical difficulties. Looking beyond technical implementation issues, central bankers and regulators are faced with two crucial questions : . - Are the standards sufficiently prudent in today's climate of economic uncertainty and mistrust of the markets, and will they address the shortcomings that have recently been revealed ? . - Is there not a risk of the standards introducing artificial volatility into financial statements, impairing a proper understanding of the true position of economic agents and likely to have an impact on prudential ratios ? . This article looks at the main changes proposed by the IASB in the light of these two questions and tries to identify the prudential consequences of these modifications. . JEL classifications : G14, G28, M41