Final CESR recommendations on transition to IFRS

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06 Jan 2004

The Committee of European Securities Regulators (CESR) has published recommendations on how listed European companies can effectively communicate to investors the financial impact of transitioning to IFRS in 2005. The recommendations identify four milestones in the transition process, as follows: Publication of the 2003 annual report (including the 2003 financial statements). Companies should explain (a) how they intend to carry out the transition to IAS/IFRS (plans and degree of achievement for the transition) and (b) the key differences between their present accounting policies and the ones they know with sufficient certainty they will have to apply under IAS/IFRS. Publication of the 2004 annual report (including the 2004 financial statements). As soon as a company can quantify the impact of the change to IAS/IFRS on its 2004 financial statements in a sufficiently reliable manner, it should disclose the relevant quantified information. 2005 interim financial reports (half-yearly and quarterly financial reports). In interim financial reports for 2005, listed companies should start applying as of 1 January 2005 either IAS 34, Interim Financial Reporting, or, if this is not possible, at least the IAS/IFRS recognition and measurement principles that will be applicable at year end. 2005 annual financial statements. For most listed companies in Europe, these will be the first complete set of financial statements presented under IAS/IFRS.

CESR does not propose a requirement for more than one year of comparatives (2004) under IAS/IFRS. But if, because of national regulation or choice, a company presents three successive periods but has not restated under IAS/IFRS the earliest period presented (2003), CESR proposes a format ("the bridge approach") for presenting comparative figures (2004 and 2003). Click for:

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