5th September 2003
A Consultation Document on the Use of Fair Value Accounting for Certain Financial Instruments by Building Societies
The Fair Value Directive (Directive 2001/65/EC of the European Parliament and of the Council) requires Member States to permit or require companies and other institutions such as building societies to account at fair value (essentially current market value) for some of their financial instruments. This will enable companies to follow modern, more transparent accounting practices in the area of financial instruments that are consistent with International Accounting Standards (IAS). The Fair Value Directive is not directly applicable in Member States, but must be implemented through national law. For building societies, this will require an amendment to the Buidling Societies (Accounts and Related Provisions) Regulations 1998 (S.I. 1998/504).
On 5 September 2003 the Government launched a consultation on the proposed amendments to the 1998 Regulations to implement the Fair Value Directive for building societies in the UK. In line with the approach taken for companies, these permit (but do not require) building societies to use fair value in their accounts. Responses are invited by 31 October 2003, and should be sent (by email if possible) to the address below. Copies sent by post should be marked “Fair Value Consultation” on the envelope.
Building Societies - Fair Value Consultation
Banking and General Insurance Team
HM Treasury
1 Horse Guards Road
London SW1A 2HQ
E-mail: mark.baldwin@hm-treasury.gov.uk
Fax: 020 7270 4694
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