02-08-2009, 08:38 AM
By Salman Siddiqui
KARACHI: The impact of investment losses in listed securities will not be shown on balance sheets under the profit and loss account for the period one year, instead these would appear under the category of ‘equity’.
A meeting among the representatives of associations of mutual funds, banks, mudaraba, insurance, leasing, commercial banks, investment banks and brokerage houses resolved this on Saturday here at ICAP where Securities & Exchange Commission of Pakistan (SECP) moderated the meeting, it was learnt.
The minutes of the meeting will be sent to SECP and then the apex regulatory body will issue the final regulations likely on Monday.
The need of the meeting to resolve this problem was felt at a very large scale, as showing of losses in the profits and loss accounts (as per IAS 39 demand) was shaking the investors confidence in the equity market, which were yet to come out of 2008 great depression. As a matter of record, the KSE had lost about 58 per cent in 2008 on year-on-year basis.
The meeting initiator Najam Ali, who is the Chairman of Mutual Fund Association of Pakistan (MUFAP) said, “the IAS 39 was itself controversial and played a key roll in creating the recent world economic recession then why should we the Pakistani companies should adopt or implement those controversial standards in letter and spirit.”
He added that the investors and the stakeholders were yet trying to come out of 2008 stocks market depression and if Pakistan promulgate IAS 39 standards then it will prove disastrous for the country economy.
Asad Ali Shah, President-ICAP said that though there was a full consensus of not showing losses in the loss and profits accounts, but he on behalf of his institutions fully advocates the implementation of International Financial Standards Regulations such as IAS 39, 39 and 28.
http://www.thenews.com.pk/daily_detail.asp?id=161350
KARACHI: The impact of investment losses in listed securities will not be shown on balance sheets under the profit and loss account for the period one year, instead these would appear under the category of ‘equity’.
A meeting among the representatives of associations of mutual funds, banks, mudaraba, insurance, leasing, commercial banks, investment banks and brokerage houses resolved this on Saturday here at ICAP where Securities & Exchange Commission of Pakistan (SECP) moderated the meeting, it was learnt.
The minutes of the meeting will be sent to SECP and then the apex regulatory body will issue the final regulations likely on Monday.
The need of the meeting to resolve this problem was felt at a very large scale, as showing of losses in the profits and loss accounts (as per IAS 39 demand) was shaking the investors confidence in the equity market, which were yet to come out of 2008 great depression. As a matter of record, the KSE had lost about 58 per cent in 2008 on year-on-year basis.
The meeting initiator Najam Ali, who is the Chairman of Mutual Fund Association of Pakistan (MUFAP) said, “the IAS 39 was itself controversial and played a key roll in creating the recent world economic recession then why should we the Pakistani companies should adopt or implement those controversial standards in letter and spirit.”
He added that the investors and the stakeholders were yet trying to come out of 2008 stocks market depression and if Pakistan promulgate IAS 39 standards then it will prove disastrous for the country economy.
Asad Ali Shah, President-ICAP said that though there was a full consensus of not showing losses in the loss and profits accounts, but he on behalf of his institutions fully advocates the implementation of International Financial Standards Regulations such as IAS 39, 39 and 28.
http://www.thenews.com.pk/daily_detail.asp?id=161350