Luxembourg, 07/06/2002 (Agence Europe) - The Council has definitively adopted the regulation that will make the use the International Accounting Standards IAS for consolidated accounts of listed companies compulsory from 2005. The regulation creates a Community mechanism to assess IAS that will be adopted by the International Accounting Standard Board (IASB), international body for accountancy standardisation established in London. An accounting regulatory committee, composed of representatives of Member states and chaired by the Commission, will decide on the possible adoption of IASs on the basis of a Commission proposal. The latter will be assisted by the European Financial Reporting Advisory Group (EFRAG), composed of accounting experts from the private sector in several Member states. Commissioner Bolkestein welcomed the fact that the Regulation "has been adopted in a single reading". "Applying them throughout the EU will put an end to the current Tower of Babel in financial reporting", and "will help protect us against malpractice", he stated. The Commissioner stipulated that on his recent trip to the United states he had seen "hopeful signs that the US will now work with us towards full convergence of our accounting standards". So far, the United States has used so-called "USGap" accounting standards, that European companies wanting to be quoted on the American stock exchange must follow, but the Enron affair led to doubts as to the reliability of these standards.
The week, the Commission proposed amendments to the accounting directive which complement the regulation on IAS, enabling Member states that do not apply the IAS to all their companies to evolve towards similar information (see EUROPE of 34 June, p.8).