Uncertainty towards Susceptibility of the European Union Financial Report

Monday, September 9, 2013 Print Email

Currently lack of certainty has spotted in the European Union Financial report prepared by Joint Committee of the European Supervisory Authorities (ESAs).ESA has published its second annual report about the threats and susceptibilities in the European Union Financial System. A lack of buoyancy has been noticed in the fundamental economic monetary situation as well as monetary performance. It has quoted in the European Union Financial Report that current accounting structure has mismanaged and misused. In addition, this mismanagement of the accounting system has considered as risk or vulnerability to the European Union Financial System. However, there is a need for the amendment or modification to correct this inadequacy of an accounting structure.

In addition, following risks and susceptibilities have identified in the European Financial Report. There is a lack of clarity about the financial information deliver to the current market, high valuation of assets in the European illiquid markets, susceptibilities in balance sheet valuations, and high valuation of goodwill with lack of buyer’s interest in buying the assets. In addition to these susceptibilities, there is some optimism regarding Fair Value Measurement in regard to symbolize the fair valuation of financial assets in the European Union Financial reports. Moreover, ESAs is considering the new impairment model of financial assets to minimize issues related to impairment of credit loss as well as retain credibility of the European Union financial reports.

Finally, ESAs agrees to this point that more clarity of information to the financial markets will instigate more certainty within shorter time duration. As state by Joint Committee of European Supervisory Authorities (ESAs), latest accounting structures, fair valuation of financial assets by Fair Value Measurement, and impairment of financial assets will help to maintain the transparency of the European Union financial reports by lowering the number of financial categories and fixing risks related to financial reports.

Moreover, complete European Union Financial Report is accessible on the ESMA website. The Chapter five of this financial report represents the lack of certainty in balance sheet valuations and risk revelation. European Banking Authority EBA also has issued a press release of this financial report on its website.

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