European Internal Market and Services Commissioner Charlie McCreevy has warmly welcomed the positive opinion of Member States in support of Commission proposals for granting equivalence to the Generally Accepted Accounting Principles (GAAPs) of certain third countries as from next year. The vote, by the European Securities Committee today, follows a favourable resolution of the European Parliament. The proposals will now pass to Parliament and Council for formal opinions and then to the Commission for adoption.
Commissioner McCreevy commented: "This significance of today's vote cannot be underestimated. This is a tremendous step in our objective of promoting the efficiency of capital markets and marks the result of several years of hard work. I would like to express my warmest appreciation to Member States and Parliament for their support in this important matter."
The EU has the objective of arriving at a common set of worldwide accounting standards for listed companies. For the interim, a key part of this strategy is to eliminate existing costly and burdensome reconciliation requirements between the EU and its key trading partners.
The proposals which are made under the Prospectus Directive and Transparency Directive determine that the GAAPs of US, Japan, China, Canada, South Korea and India are found to be equivalent to International Financial Reporting Standards (IFRS) as adopted by the EU. The Commission will review the situation of some of these (China, Canada, South Korea, India) by 2011 at the latest.
The EU was the first major jurisdiction to make since 2005 IFRS mandatory for its listed companies, thus setting the foundation for the current success of these standards, and it remains by far the largest jurisdiction applying IFRS.
