EC will request modifications of IAS for use in Europe

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09 May 2003

The European Commission has published its Internal Market Strategy 2003-2006 (PDF 220k), a ten-point plan to make the Internal Market work better.

Point 6 – improving conditions for business – states that the European Commission will request "appropriate modifications" to certain existing IAS before they will be endorsed for use in Europe. An EC Accounting Regulatory Committee has been established for that purpose:

"A recently adopted Regulation requires all EU-listed companies to prepare their consolidated accounts in accordance with International Accounting Standards (IAS) from 2005. This will bring transparency and greater comparability between the consolidated financial statements of EU listed companies, hence better capital allocation and possibly a reduction in the cost of capital. IAS are established by the International Accounting Standards Board, an independent international accounting standard-setting organisation. In order to ensure appropriate political oversight, the Regulation stipulates that IAS to be applied in the EU will also have to be endorsed into Community law. Existing IAS will be endorsed during 2003, provided that, for some of them, the appropriate modifications are made."

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