Ireland National Professional Organisation Website: Institute of Certified Public Accountants in Ireland National Professional Organisation Website: Ireland - Institute of Chartered Accountants in Ireland Response to IFAC Member Body Survey on Standard Setting and Regulation Update for November 2009 Update for March 2005 Financial Reporting Framework in Ireland 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. Ireland is an EU Member State. Consequently, Irish 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 27 Member and 3 EEA States (PDF 52k) 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. November 2009 Update Moving to the IFRS for SMEs in Ireland Since 2005, listed groups in Ireland have been required to prepare their consolidated financial statements using IFRSs. Almost all other groups have a choice. They can use IFRSs, Irish GAAP as developed by the Accounting Standards Board (ASB), and if they are small they have a further option of using the Financial Reporting Standard for Smaller Entities (FRSSE). But from 2012, the options are expected to change. Irish GAAP is expected to be replaced with the IFRS for Small and Medium-sized Entities. Deloitte (Ireland) has published Choosing Your GAAP: Planning for the Proposed Removal of Irish GAAP (PDF 4,132k) explaining the ASB's plan. The publication examines the choices, explains the key areas of accounting and tax impact, and provides guidance on planning for the change. The entities directly affected by these plans include: Companies which are listed and have not adopted IFRS in their individual financial statements Subsidiares in listed groups that have not adopted IFRS throughout the group All public limited companies that are not publicly accountable All private groups and companies Where consolidated accounts are prepared using IFRS, company law allows a choice of using Irish GAAP or IFRS for the company's individual financial statements. Deloitte research shows that many listed companies still use Irish GAAP in their parent company only accounts and thus use Irish GAAP for their Irish subsidiaries. Many others use IFRS for the parent company only accounts but continue to use Irish GAAP for subsidiaries. March 2005 Update Ireland Extends IFRSs to All Companies The Irish government has passed legislation that permits all companies in Ireland to use IFRSs in both their consolidated financial statements and their separate company financial statements. Click to download Statutory Instrument No. 116 (PDF 997k), which is the enabling legislation.