Responses to the EC fitness check on public reporting by companies

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18 Nov, 2018

In March 2018, the European Commission (EC) published a consultation document 'Fitness Check on the EU Framework for Public Reporting by Companies'. While the document itself seemed oddly against the use of IFRSs as issued by the IASB, responses reveal that the majority of stakeholders are strictly against "EU carve-ins" that could lead to "EU-IFRSs".

Stakeholders from 23 EU Member States and 25 third countries (among them stakeholders from Australia, Canada, China, Japan, South Africa, and the United States) submitted 338 responses to the consultation. Approximately 60% of the responses were submitted by entities located in Germany, the United Kingdom, Belgium, France, and the Netherlands. For the majority of respondents, the EU framework for public reporting works well as it brings added value, is coherent, effective and relevant for achieving its intended objectives.

As regards the IAS Regulation and International Financial Reporting Standards (IFRS), a majority of respondents supported the status quo as regards the EU IFRS endorsement process (“yes-no” endorsement process with no changes to IFRSs as issued by the IASB) and cautioned strongly against “carve-ins” and "carve-outs" that could lead to “EU-IFRSs”, a situation that could be detrimental to EU companies active globally and to foreign investments into the EU. Answers to this question showed respondents from France to be the strongest voice for changes (75% of the respondents located in France would support changes to IFRSs as issued by the IASB (mostly banks and insurers or the organisations representing them)) while respondents from all other major Member States saw a only a 15% support for changes. Similarly, only 2 of the over 40 respondents from third countries supported EU flexibilty in adopting IFRSs. All supporters of flexibility in adoption indicated that “EU carve-ins” should be applied in very limited and well-defined circumstances, under strict conditions and with a sound (public) decision making process.

The responses to the consultation can be accessed in two ways on the EC website:

The Commission notes that it will report on the overall fitness check in a Commission Staff Working Document by mid-2019.

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