European Commission concludes evaluation of the IAS Regulation
19 Jun 2015
The European Commission has published a report on the evaluation of its Regulation on the application of International Financial Reporting Standards (IFRS). The evaluation aimed at establishing whether the initial objectives of the IAS Regulation are still relevant and at identifying areas for improvement in the functioning of the IAS Regulation, if needed.
The key findings of the evaluation launched in August 2014 show that IFRSs were successful in creating a common accounting language for capital markets. Preparers claimed mostly positive experiences regarding their application of IFRSs and stated that in most cases benefits outweighed costs. Investors also largely supported IFRS for improving the transparency and comparability of financial statements. In addition, most stakeholders considered that the process through which IFRS become part of EU law works well; the recent reform of the European Financial Reporting Advisory Group (EFRAG) was supported.
However, the report also identifies room for improvement in some areas. Respondents feel that the collaboration in the endorsement process could be enhanced to improve timeliness and to allow for a more holistic consideration of standards with other aspects of EU law. They also stated that while an endorsement process remains necessary to ensure that the standards developed by the IASB meet EU criteria and are conducive to the European economy, procedures could be simplified.
All in all the Commission concludes that:
- The key objectives of the IAS Regulation have been met.
- Evidence suggests that the existing scope of the Regulation and the options given to Member State are appropriate.
- The Commission supports IFRS as global standards and continues to urge the US SEC to adopt IFRS for use by its domestic companies.
- The effectiveness and efficiency of the Regulation depend on the quality of the standards themselves which should continue to be appropriately assessed during their development and endorsement.
- The Commission encourages Member States to apply ESMA enforcement guidelines.
Please click for the following information on the European Commission's website:
