Taken from: Il Sole 24 Ore, PLUS insert
Date: Friday 31st December, 2004

Small Caps / The risks according to Ashwinpaul Sondhi

The Ias accounting principles? Still few people know about them. Ashwinpaul Sondhi, member of the Fasb emerging issues task force, the American organization whose mission it is to set accounting standards, is considered one of the world’s foremost experts on the new international accounting standards.

Mr. Sondhi, what’s the present situation?

There are still many delays. The new Ias accounting principles are still not well known and their application is long and costly. A lot of time is needed before the accounting registrations can sorted out in line with the new guidelines, and we do not have much time left. I don’t think that many companies will have their balance sheets perfectly up to scratch in relation to Ias principles in 2005.

Are you worried about anything particular? The small and medium enterprises with smaller structures are those in most difficulty and are those who will see the greatest delays.

Is there a European country better positioned than others?

Given that the existing system is very similar to that being introduced by Ias, I think that English companies have an advantage over other countries who will need to make many changes to get in line, like Germany for example.

Which sectors will be hit hardest?

Generally speaking, all companies who make major use of derivatives, like mining companies for example, who use derivatives on raw materials. They too will have to make many changes to their balance sheets.

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