The opposition to the new accounting standard, known as Standard 12, is gaining momentum.

According to this standard, public companies will now have to submit financial reports based on nominal values instead of real values.

The Israel Electric Corporation failed in District Court to win an exemption from the standard. Now it is the turn of two other companies to petition against this standard to the High Court.

In coming days Housing and Construction and the Mekorot water company are to petition against this standard, through Ram Caspi law office, has learned.

Housing and Construction will be challenging the authority of the Securities Authority, a statutory corporation, to establish a private company, Financial Accounting Standards Board. The petitioners will among other things base their case on the position of the attorney general, as put forward in the petition of the Israel Electric Corporation.

Attorney General Elyakim Rubinstein did not express his view whether professionally the new standard is right or not. But he said that the very existence of a professional organization involved in accounting standards, such as FASB, seems appropriate, although it must have the right legal structure.

Rubinstein said that establishing an accounting standards entity as a private firm in which a statutory body is a partner is problematic, and at this stage no final decision has been taken on what would be the right format for this institute.

Housing and Construction Holdings and Mekorot are to submit with their petitions reports by experts that say that they will be severely hurt if they have to comply with the new standard.

Housing and Construction will argue that should it have to submit nominal reports these will involve an artificial loss of NIS 20 million for each 1% of inflation.

Mekorot claims that 2.5% inflation will result in it posting an artificial loss of NIS 100 million.