Dubai: Arab banks should have their own accounting standard to meet challenges, Adnan Ahmad Yousuf, chairman of the Union of Arab Banks (UAB), told Gulf News.
"The GCC [Gulf Cooperation Council] and other Arab countries should have an accounting standard which should assess the application of the accounting practices prescribed by the global accounting setting bodies in our countries," he said.
He was in Abu Dhabi to attend a regular meeting with the Arab Monetary Fund officials.
"This commission will not only have our say in important standard formulation like the International Accounting Standard (IAS) 39, but it can also represent the Arab world in the world accounting bodies in formulating and review of the standard settings procedures," he said.
"The current [global] financial crisis has impacted the region's banking and financial sector and brought challenges to us. This crisis, which was triggered from the default of the subprime loans or the so called toxic assets in the US, has engulfed, directly or indirectly, the entire world economy into it.
"We can't blame local banks as the crisis is an international one."
These accounting standards, formulated mostly to suit the advanced developed markets, will not exactly meet our requirements, he said.
"Our markets are not yet fully matured for these standards to be implemented in our countries in respect of the size of the capital markets, the corporate culture, the corporate and other fiscal laws."
The International Accounting Standards Board recently published an exposure draft on the classification and measurement of financial instruments. This is the first of three planned phases to replace the controversial IAS 39, which determines how financial assets and liabilities are accounted for.
The proposed changes to the IAS 39 aim to reduce the complexity of accounting by reducing the number of classification categories to two measurement categories: fair value or amortised costs.
