ISLAMABAD, Aug 1: Pakistan is partially complying with the international financial reporting standards as its banking sector and financial institutions are not following the fair-value accounting, said Abbas Ali Mirza, chairman UNCTAD’s inter- government working group of experts on international standards of accounting and reporting.

Talking to Dawn, Mr Mirza, who is the co-author of a book ‘Interpretation and Application of International Accounting and Financial Reporting Standards’, said Pakistan was complying with all standards except IAS-39, which dealt with banks and financial institutions.

The IAS-39 deals with derivatives and the banks are of the opinion that they make investments on long-term basis and do not intend to take into account short-term fluctuations. However, Mr Mirza insists that the banks should follow fair value accounting and should learn from the examples of Barrings Bank collapse. The European Union (EU), he said, had a “carved-out” version of IAS-39.

International Accounting Standards (IAS) are receiving more attention than ever, having now been endorsed by the International Organization of Securities Commissions and the EU. The EU now requires that listed companies throughout the EU apply IAS instead of previously adopted national accounting standards for consolidated financial reporting.

The IAS are being accepted globally with growing list of countries complying with them. Mr Mirza calls IAS as the Esparanto of the accounting standards. He says this movement of adoption of IAS is spreading like wild-fire as globalization demands that all financial transactions should be described according to some particular standards instead of the different national standards.

The IAS, he said, pertained to information and complete disclosure to the investors so that they could make the right decisions. The World Bank, Mr Mirza, said had linked future assistance for any country with compliance of IAS.

Mr Mirza’s book, which he had co-authored with Barry J. Epstein, (Interpretation and Application of International Accounting and Financial Reporting Standards) is popularly called the Harry Potter of the accounting world.

The first edition of this book was launched in 1997 and was the first book in the world on international accounting standards. Mr Mirza, an American of Pakistani origin, is here to launch the 2005 edition of the book.

The Pakistan launch of the book is being held at Institute of Cost and Management Accountants of Pakistan (ICMAP) on Tuesday. The book is the compact yet truly comprehensive quick reference guide that accountants can depend on to assist in the understanding and preparing of financial statements presented in accordance with IAS. This edition includes complete coverage of all standards and interpretations based or revised by the IAS Committee as well as IAS Board.

The book also offers in-depth coverage of the latest changes made to the standards by the IASB’s Improvement Project this year.