Luxembourg Luxembourg is included in the IFAD GAAP Convergence Studies National Professional Organisation Website: Institut des Reviseurs d'Entreprises Response to IFAC Member Body Survey on Standard Setting and Regulation Financial Reporting Framework in Luxembourg 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. Luxembourg is an EU Member State. Consequently, Luxembourg 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. May 2007: Comparison of Luxembourg GAAP, IFRSs, and US GAAP Deloitte & Touche (Luxembourg) has published Lux GAAP–IFRS–US GAAP: A Comprehensive Comparison (PDF 332k). This publication sets out the key differences between Luxembourg GAAP, IFRSs, and US GAAP as of 28 February 2007. Regarding Luxembourg GAAP, the report states: IFRS will be introduced into the local Luxembourg commercial law as an alternative to the current Luxembourg accounting principles. The international standards have already been included as an accounting option for credit institutions. The Luxembourg authorities are working on a draft commercial law, this will give the option to use IFRS for statutory accounts, to any limited companies registered in Luxembourg. May 2001 Update Luxembourg reporting requirements are based on the Commercial Law of August 10, 1915 (as amended), which incorporates the EU 4th and 7th Directives. The EU Banking and Insurance Directives are incorporated into the banking and insurance laws respectively. As such, the Luxembourg accounting environment for statutory accounts is not very detailed, resulting in more options and far less disclosure than would be required under IAS. With the exception of IAS 39, a commercial company wishing to comply with IAS should be able to comply with the Luxembourg Law and IAS simultaneously, and a few companies in Luxembourg produce IAS accounts. However, with IAS 39 becoming effective, this will no longer be the case as Luxembourg Law does not allow the revaluation of assets upwards (prudence being the over riding concept). Luxembourg has made some tentative steps towards IAS. The projet de loi of 18 May 1999 covering accounting and filing reforms includes a proposal to allow large companies listed on foreign stock exchanges, to individually apply for the ability to report under IAS (or other recognised national GAAP such as US GAAP). However, as compliance with the European Accounting Directives will still be required, IAS compliance is not currently possible. This projet de loi was issued prior to the proposal that all EU listed companies must comply with IAS by 2005, at the latest, but the proposal has been the impetus for many companies in Luxembourg to begin considering the impact of IAS on their financial statements.