Brussels, 26/07/2004 (Agence Europe) - The European Commission sent reasoned opinions to Belgium, Greece, France, Ireland, Luxembourg, the Netherlands and Finland on Thursday 22 July, asking them to transpose the 2001 directive on accounting rules into their national legislation. If no satisfactory response is received within two months, the Commission could decide to take these member states to the European Court of Justice.
The directive concerned requires that member states must allow or require that all companies, or certain categories of company, apply the "fair value" system to certain financial instruments, including derivatives. It is designed to ensure the application of International Accounting Standard (IAS) 39, "recognition and measurement of financial instruments". Such application, whether voluntary or obligatory, may be restricted to consolidated accounts.
To justify the delay, some member states ... by the Commission have mentioned the difficulty of adopting IAS 39 within the framework of International Accounting Standards. The Commission, however, does not see any reason to delay the transposition of the directive, "because this is mainly an enabling exercise, i.e. Member States do not have to require companies to apply IAS 39". The Commission also stated that the disclosure provisions of the directive should allow a better insight into the way in which companies treat financial instruments in their financial statements, and that "these cited provisions are very important and are independent of the way in which financial instruments have been accounted for".
The Commission also indicated that the issue is in no way linked with a possible Commission decision as to whether IAS 39 should be applied on a mandatory basis for the consolidated accounts of all EU listed companies from 2005. This will be decided on later in the year. The infringement only relates to the possibility for companies to voluntarily apply IAS 39 from now on.