FEE represents 44 professional institutes of accountants from 32 countries. Based on its analysis, FEE makes the following recommendations:
- FEE calls on the European Commission to issue authoritative guidance on how European companies should refer to their financial reporting framework. "There is a clear need for a standard wording."
- FEE recommends a change to the EC's previously suggested reference to the financial reporting framework: "Precision would be added if it were amended to: in accordance with IFRSs as adopted for use in the EU." Specifically the reference to the plural of IFRSs is considered significant to highlight that standards are endorsed one by one.
- Companies are strongly encouraged to explain, in the notes to the accounts, how their accounting policies, applying IFRSs as endorsed for use in the EU, depart from full IFRS. "This will enable investors to understand the impact and to compare the results of companies within and outside the EU."
- The reference in the audit report should be the same as in the accounting policies.
- Where companies are in compliance with full IFRS, they should be encouraged to say so in their accounting policies. However, the legal financial reporting framework in the EU needs to be referred to in all cases.
This is not just a European issue because national adoptions of IFRSs elsewhere around the world have included additions, deletions, and changes to the IASB standards as well as time lags between IASB adoption and local adoption. Click for: