Speaking at "A Single Market in European Accounting," Simmonds told a gathering of accountants from 35 countries that, with the exception of IAS 39, Financial Instruments: Recognition and Measurement, "we will be the same as everybody else, even if it doesn't suit us."

In the past, he said, the UK had taken the opposite view, that "we will be the same as everybody else, except when it doesn't suit us."

He said that the UK was drawing closer to IASs over pensions and leasing.

However, the main sticking point is IAS 39. Unlike other IASs which adopt the philosophy of short, principle-based standards, IAS 39 is more like a US rule-based standard, and, as a result, has raised an enormous set of questions about its implementation, which have been tackled by the IASC in a series of published questions and answers.

"IAS 39 will not go down well in the UK," Simmonds said. "The key issue will be the UK's concept of profit. The UK understands what profit is. It is different from the IAS definition of net income."

IASC secretary general Sir Bryan Carsberg, however, said that while the UK has always been strong on setting national accounting standards, it hasn't taken any "significant steps" in accepting IASs. "The UK has recognized the need to change in some areas, and will need to change in the future. No country has a monopoly of wisdom."

"The UK hasn't yet developed a standard in accounting for financial instruments. It is waiting for comprehensive full fair value accounting. I think this is wrong, because it will take a long time to reach agreement on this. Accounting needs a pragmatic approach and the UK will find it will take a long and difficult time to find an alternative to IAS 39."

Commenting further on the EC's call for compliance with IASs by 2005, Simmonds said that the UK is not in favor of the endorsement mechanism - which will screen IASs at a technical and political level - "but we've lost that one."

However, he said that the UK was in favor of other elements as in the acceptance of a standard in its entirety or not at all.

'We are in favour of drawing from national standard-setters under the new IASC's constitution. We also like the goal of global enforcement,' he added.

However, on the question of who should pay for implementing the EC's plans for compliance with IASs, Simmonds was emphatic that the Commission should foot the bill, and not seek contributions from member states.

Send comments to information@smartpros.com.

Copyright 2000 AccountancyMagazine.com. Used with permission.