On Wednesday, 18 March, MEPs on the Committee on Economic and Monetary Affairs (ECON) took stock of the place that International Financial Reporting Standards (IFRS) hold in the European regulatory framework as well as the future of sustainability standards and their relationship with European standards. Three individuals responsible for international accounting governance were invited for the occasion: International Financial Reporting Standards Foundation Chair Erkki Liikanen, International Accounting Standards Board (IASB) Chair Andreas Barckow, and International Sustainability Standards Board (ISSB) Chair Emmanuel Faber.
Mr Liikanen spoke in support of IFRS as “global public goods” that are essential to market transparency and the financing of the economy, especially with regard to attracting private capital. He was confident regarding the strength of the consensus on accounting standards—noting, nevertheless, persistent political differences on sustainability, especially with the United States.
Mr Barckow emphasised continuously improving standards and reducing costs for companies, notably advocating the use of the IFRS standard for SMEs in European deliberations on a simplified regime.
Mr Faber highlighted the progress made in aligning ISSB standards and European Sustainability Reporting Standards (ESRS). He mentioned the possibility of, eventually, allowing European companies to meet international requirements directly through their ‘CSRD’ reporting so as to spare them from having twice the obligations, provided that the information is clearer for investors.
MEPs questioned the chairs on the risks of standards becoming fragmented, the position taken by the US, the options for simplification, and the impact of artificial intelligence. While political tensions were acknowledged, the three experts felt that the markets were continuing to operate based on common frames of reference, driven by investor needs. (Original version in French by Bernard Denuit)