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EC launches fitness check on public reporting by companies

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21 Mar 2018

The European Commission (EC) has published a consultation document 'Fitness Check on the EU Framework for Public Reporting by Companies' The document seems oddly tilted against the use of IFRSs as issued by the IASB.

In the section "The EU financial reporting framework for listed companies", the document notes different levels of commitment to require IFRS as issued by the IASB around the globe and asks whether it is "still appropriate that the IAS Regulation prevents the Commission from modifying the content of IFRS". It also asks whether EU endorsement process is appropriate to ensure that IFRSs do not pose an obstacle to broader EU policy objectives such as sustainability and long-term investments. In each case, "yes" can be checked without further substantiation, "no" needs to be substantiated. 

The questionnaire also asks how the EU can ensure that IFRSs do not pose an obstacle to sustainability and long-term investments. Again the only answers offered are (a) "By retaining the power to modify the IFRS standards in well-defined circumstances" and (b) "By making explicit in the EU regulatory framework that in order to endorse IFRS that are conducive to the European public good, sustainability and long term investment must be considered". "Other" opinions must be specified, unless they are "Don't know".

Please see the full consultation document on the EC website. Comments are requested by 21 July 2018.

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