Davies
Denise Clarke, Staff Reporter
WESTERN BUREAU:
THE MINISTER of Finance, Dr. Omar Davies, has called for prompt implementation of International Accounting Standards (IAS), for which the deadline is June 30.
Speaking on Friday at the opening session of the 21st Caribbean Conference of Accountants held at the Ritz-Carlton Hotel in Montego Bay, Dr. Davies said delaying the implementation of IAS could harm Jamaica's prospects for attracting foreign investment. His comments come against the background of concerns raised by some members of the accounting profession, who have asked for a postponement of implementation of the IAS.
"I recognise that there are some challenges in implementing certain aspects of IAS 39 at this point in time but my firm view is that these challenges are not insurmountable. I believe that the profession, its clients and the regulators should be able to arrive at a consensus on how to apply IAS 39 to Jamaican financial statements without major adverse repercussions," Dr. Davies maintained.
Some of the concerns raised by accountants and interest groups, the Finance Minister said, includes the potential that these standards have to impact adversely on reported capital; and volatility in the prices of Jamaican Euro Bonds, which it is believed can also impact adversely on the worth of financial institutions. Other concerns are the requirements for certain financial instruments to be marked to market, meaning that these instruments should reflect the prevailing interest rate.
However, Dr. Davies noted that while some of the concerns have validity, the answer cannot be found through further delay in implementing the IAS. He was also concerned about the fact that the delay comes three years after Jamaica publicly announced its adoption of IAS, and that the International Federation of Accountants (IFAC) has already included Jamaica on its list of countries that have adopted IAS. "The fact that we have adopted IAS has also provided an international lending agency with the basis for providing funding which support the upgrading of the regulatory framework of the accounting profession. Furthermore, some of our overseas competitors belong to the jurisdictions that have adopted IAS. It is in that context that delaying implementation would put our economy at a disadvantage when it comes to attracting foreign investment," Dr. Davies said.
He added though, that he is not opposed to hearing persuasive arguments for delaying implementation. However, he encouraged members of the accounting profession and its regulatory bodies to work together to develop a suitable mechanism for arriving at the fair value of fixed income debt which currently dominate the investment portfolios directly held or managed by financial sector entities.
