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Published on October 19, 2007

IAS39 requires all financial assets and financial liabilities, including derivatives, to be recognised on the balance sheet when the entity becomes party to the contractual provisions of the instrument. It focuses on the evaluation of financial instruments, specifying the circle of use of fair value as the criterion of evaluation.

Current accounting standards in Thailand do not require companies to realise or even disclose any financial instruments in which they are involved on their balance sheets.

"We expect that the full version of the IAS39 will be implemented in Thailand in 2010 and all financial institutions and companies will have to comply with it. The Bank of Thailand's version of IAS39 will be revoked as it is only part of the full IAS39. Other countries to implement IAS39 in the same year as Thailand are South Korea, Japan and Malaysia," she told a press conference.

Although the full version of IAS39 will place additional burden on companies, it will be good for the future as their balance sheets will more closely reflect reality and foreigners will accept that Thai companies' balance sheets are transparent and credible, said Nangnoi.

IAS39 is one of 28 accounting practices being amended by Thailand's Federation of Accounting Professions to align with international accounting standards. All are currently under review by the relevant parties.

The other 27 accounting practices involve switching from the use of historical cost to fair value as the criterion of evaluation.

The adoption of the amended accounting practices by all industries is unavoidable as they have to comply with international accounting principles, Nangnoi said.

"Executives should monitor, study and prepare human-resource and operation systems, particularly computers, for the new accounting standards," she added.

Siriporn Chanjindamanee, The Nation