Standard challenges

Early signs suggest European energy companies may, like their US counterparts,have problems complying with a new derivatives-accounting standard. But theydo have newguidelines to help interpret the rules. By Joe Marsh

For their 2005 accounts – and 2004 accounts, if they so choose – Europeancompanies trading energy will have to complywith a new standard governing accounting forderivative contracts. In light of the problemsUS companies have faced over the equivalentUS rules – Financial Accounting Standard 133(Fas 133 – see box), their Europeancounterparts may have a hard time ahead withInternational Accounting Standard Board’s(IASB’s) IAS 39. However, a trade body set uplast year – the International