Charlie McCreevy, European Commissioner for the Internal Market announced the outcome of the IFRS 8 review by the European Commission yesterday when making a speech to the The European Parliament Committee On Economic and Monetary Affairs. e said

I am .. pleased to present our "Analysis of Potential Effects" on the introduction of IFRS 8 in the EU. Our report is based on a wide-ranging consultation to which more than 200 organisations replied. It focuses on the issues discussed in ECON last April.

The report concludes that adoption of IFRS 8 would have positive cost-benefit effects. This is in line with the clear majority of answers to our consultations and with most views expressed in discussions with stakeholders.

In particular, the report concludes that:

- The use of the "management approach" in IFRS 8 has an overall positive effect on the quality of segment information, whose usefulness and relevance would increase.
- The increased usefulness and relevance of segment information based on the management approach outweigh concerns expressed about the comparability of financial reports.
- IFRS 8 appropriately addresses the global needs of users of financial statements' for geographical disclosures and, in practice, would not reduce this information by comparison with the "old standard" IAS 14.
- IFRS 8 does not create problems relating to corporate governance in the EU.
- IFRS 8 provides appropriate segment reporting rules for smaller listed companies. It is in the interest of smaller listed companies to provide the same information as larger companies as the information needs of investors are do not substantially differ according to company size.

We are encouraging further information on Corporate Social Responsibility in separate reports and we are supporting the development of guidelines for such disclosures.

A decision soon by the European Parliament on IFRS 8 would remove uncertainty about the treatment of segmental information in 2007 financial statements. Issuers are pressing us for an early indication of our intentions. An endorsement of IFRS 8 would furthermore support the EU's overarching objective of "IFRS as adopted in the EU" being recognised in all jurisdictions, including the US, without requirement for reconciliation.

We look forward to receiving the Parliament's comments on the report, and my Services are at your disposal should you need further assistance.

I have only had brief opportunity to review the report that I have secured issued to the Parliament by the Commission. But one thing strikes me immediately. That is that its quality is so bad, its arguments so poor, its logic so awry that the only way it could have been written was by starting with a fixed conclusion and working backwards.

I strongly suspect that Piotr Madziar, the Pole who was heading this review and who had a mysterious change of job at the end of August refused to endorse this. I met him as part of the review process and believed him to be a man of integrity. But the report itself has no integrity.

Thankfully I gather this is not the end of the story. The European Parliament is to review the quality of the report and is apparently asking the Bruegel Institute to analyse and comment upon the recommendation. As the EC says in its own report:

A report from the Bruegel Institute mentioned in part 4.2.1 of this report criticises the quality of IFRS 8 and of the information it requires. The report also states that this standard has been issued just for convergence reasons and does not take users' views into account properly.

This is encouraging. I am not expecting them to be enamoured by this shoddy piece of work.

But I am left with one question, which is how come a decision which so many users opposed, whether they be major investment groups like the Investment Management Association in the UK or civil society groups like those working under the Publish What You pay umbrella came to be endorsed? Is it:

a) the power of the Big 4 - who support this and do, after all, effectively control the IASB, making it an in-house law maker for themselves, or

b) fear of the management of multinational corporations, a class of people who clearly have no regard for shareholders or anyone else and for whom IFRS 8 is a PR God send, or

c) something more sinister altogether? Something I'd call cashocracy: the rule of money, where nothing else matters?

I don't know. But it worries me, a great deal.