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Belgium Belgium is included in the IFAD GAAP Convergence Studies National Professional Organisation Website: Institut des Experts Comptables National Professional Organisation Website: Institut des Reviseurs dŽEntreprises Response to IFAC Member Body Survey on Standard Setting and Regulation Update for September 2005 Update for May 2003 Financial Reporting Framework in Belgium Adoption of IFRSs in Europe Effective in 2005 In June 2002, the European Union adopted an IAS Regulation requiring European companies listed in an EU securities market, including banks and insurance companies, to prepare their consolidated financial statements in accordance with IFRSs starting with financial statements for financial year 2005 onwards. EU countries have the option to: Require or permit IFRSs for unlisted companies. Require or permit IFRSs in parent company (unconsolidated) financial statements. Permit companies whose only listed securities are debt securities to delay IFRS adoption until 2007. Permit companies that are listed on exchanges outside of the EU and that currently prepare their primary financial statements using a non-EU GAAP (in most cases this would be US GAAP) to delay IFRS adoption until 2007. The European IAS regulation applies not only to the 27 EU Member States but also to the three members of the European Economic Area (EEA) – Iceland, Liechtenstein, and Norway. Belgium is an EU Member State. Consequently, Belgian companies companies listed in an EU/EEA securities market will follow IFRSs starting in 2005. In January 2005, the European Commission published the results of a survey of the 25 EU member states and the 3 EEA member states on their plans regarding the four options above. For information on each country's plans, click to download: Table on Use of IFRS Options in 25 Member and 3 EEA States (PDF 40k) The European Commission has adopted the following wording for use in the notes to the accounts and in the audit reports of companies subject to EU Regulation 1606/2002/EC (the 'IAS regulation'): "in accordance with International Financial Reporting Standards as adopted by the EU" or "in accordance with IFRSs as adopted by the EU". Companies may also state, in a footnote, compliance with IFRSs as adopted by the IASB, if that is the case. September 2005 Update Unlisted Belgian Banks Must Use IFRSs Under a Royal Decree dated 5 December 2004, unlisted banks and other credit institutions in Belgium will be required to use IFRSs in their consolidated financial statements starting in 2006. Listed Belgian companies, including credit institutions, must prepare their consolidated financial statements using IFRSs starting in 2005 under the EU Accounting Regulation. If an unlisted credit institution is a wholly-owned subsidiary of a foreign parent, preparation IFRS consolidated statements may not be required if certain conditions are met, including the filing of consolidated financial statements of the foreign group in French or Dutch in Belgium. Belgium does not permit IFRSs to be used in separate financial statements. May 2003 Update Belgium proposes to adopt IAS/IFRS in 2007 The Belgian Commission for Accounting Standards (CBN/CNC) has recently proposed a comprehensive approach to adopting IAS/IFRS in Belgium by all Belgian entities starting in 2007: Consolidated annual accounts: CBN/CNC is proposing that IAS/IFRS be mandatory for all consolidated annual accounts starting from 2007. This would impact more than 600 Belgian non-listed entities that now prepare consolidated annual accounts. Until the EU IAS regulation comes into force in 2005 (which obliges listed entities to adopt IAS/IFRS in preparing their consolidated accounts), the CBN/CNC would reform its policy with respect to the use of non-Belgian GAAP. Specifically, it would make it easier for both listed and non-listed companies to get permission to use IAS/IFRS for their consolidated financial statements and would no longer allow a company to adopt US GAAP or any other GAAP in substitution for the Belgian GAAP. As a result, entities would be able to use IAS/IFRS for their consolidated annual accounts even before 2005. Statutory annual accounts: CBN/CNC also has proposed an ambitious plan to converge the Belgian Accounting Law with IAS/IFRS as from 2007. Taking into account the scope and the importance of this harmonisation task, the CBN foresees putting all adaptations simultaneously into effect on 1 January 2007. The CBN/CNC indicated that the adaptations to the Belgian Accounting Law would be tackled pragmatically and that the Belgian context and the scope of the entities concerned would be taken into account explicitly. Click here for the proposal in Dutch (PDF 169k) or French (PDF 165k).