Brussels, 22/04/2008 (Agence Europe) - On Tuesday 22 April, the European Commission published the second report on third countries in the process of converging their national accounting standards towards the International Financial Reporting Standards (IFRS) which are used in the European Union (see EUROPE 9467). On the basis of the opinion given by the Committee of European Securities Regulators (CESR), the Commission says that the accounting standards of the United States (US GAAP) and of Japan both meet the criteria of equivalence to IFRS. Legislative proposals will be brought forward in the next few weeks to establish this equivalence legally.
The Commission said that work on the convergence process of the US GAAP and IFRS progressed at appropriate speed in 2007. Thus, it agreed with the CESR opinion that the accounting standards used by US companies listed in the EU are equivalent to European standards. In November 2007, the US authorities decided to accept the accounting documents of European companies listed in the US, published in line with IFRS (see EUROPE 9545). Immediately afterwards, Internal Market Commissioner Charlie McCreeevy said that it would be up to the EU to accept the accounting documents of US companies listed in Europe and using US GAAP standards (see EUROPE 9553). Furthermore, in the light of the serious efforts made by Japan in 2007, the CESR recommended that, from June 2008, the Commission deem Japanese accounting standards to be equivalent to IFRS, on condition that the timetable set for convergence was adhered to. The Commission intends to accept the CESR advice.
The CESR believes that Chinese accounting standards can be accepted in the EU during a transition period insofar as they are in the process of converging towards IFRS. The final decision on the equivalence of Chinese and European accounting standards will, however, not take place until 2011, to allow time for information to be gathered on the appropriate implementation of Chinese standards. With Canada and South Korea having undertaken to apply IFRS by 2011, companies from these two countries listed in the EU will no longer be required to adapt their accounting documents to IFRS. Australia, South Africa, Hong Kong, New Zealand and Singapore already apply European standards. Israel has made IFRS compulsory for listed companies, with the exception of banks, from January 2008. Regulation 1569/2007/EC establishes a mechanism to determine equivalence between the accounting standards of a third country and the IFRS (see EUROPE 9575). (M.B.)