EC begins study of equivalence of national GAAPs to IFRSs

30 Jun 2004

The Accounting Regulation adopted by the European Union requires that European companies listed in a regulated European securities market must prepare their financial statements in conformity with International Financial Reporting Standards starting in 2005. Subsequent legislation provides that non-European companies whose securities are listed in a regulated European securities market must also follow IFRSs starting in 2007 unless the Commission has agreed, prior to 1 January 2007, to recognise financial statements prepared in accordance with "third country GAAP" (a non-European national GAAP) as being equivalent to those prepared in accordance with IFRSs.

The European Commission has asked the Committee of European Securities Regulators (CESR) to assess the IFRS-equivalence of the following GAAPs by June 2005: US-GAAP, Japanese GAAP, and Canadian GAAP.

Click to download the full EC Formal Mandate to CESR regarding CESR's assessment (PDF 32k). The mandate states that:


In giving its advice, CESR should take full account of the following key objectives:

  • When assessing as to whether financial statements prepared under third country GAAP provide a true and fair view of the issuer's financial position and performance, the priority should lie on assuring the protection of investors;
  • A global and holistic assessment of the quality of the financial information provided by the accounting system in question should be carried out from a technical point of view and independently from any international convergence project aiming at a single set of accounting standards, such as the project currently conducted by the International Accounting Standard Board and the US Financial Accounting Standard Board.
  • The global and holistic assessment should be based on the entirety of the third country GAAP in force as of 1 January 2005. The assessment should focus only on the significant differences between IAS/IFRS as endorsed at EU level and the third country GAAP in question.
  • The assessment should not relate as to whether the third country GAAP in question might be conducive to the European public good. This is a criterion for endorsing IAS/IFRS at European level pursuant to Article 3(2) of the IAS Regulation, but not for assessing equivalence.
  • The assessment should also be carried out independently of whether the third country concerned already recognises IAS/IFRS as equivalent to their domestic GAAP.


EU and US agree to promote international accounting convergence

30 Jun 2004

Following discussions on 25-26 June 2004, the participants in the US-EU Financial Markets Regulatory Dialogue have agreed to "promote international convergence of accounting standards, including their consistent application, implementation, and enforcement".

Dialogue participants are the European Commission and the United States Treasury, Securities Exchange Commission, and Federal Reserve Board. Click for (PDF 19k).

EFRAG submits comments on IASCF constitution review

30 Jun 2004

The Supervisory Board and the Technical Expert Group of the European Financial Reporting Advisory Group (EFRAG) have jointly submitted a Letter of Comments about the IASB and IFRIC (PDF 48k) to the IASC Foundation constitution review committee.

Among other things, EFRAG requests formal liaison standard setter status with the IASB, observer membership of the IFRIC, and formal status as a member of the Standards Advisory Council.

New Accounting Roundup newsletter posted

29 Jun 2004

Deloitte (United States) has published the 28 June 2004 edition of (PDF 188k).

This newsletter briefly describes key regulatory and professional developments that have recently occurred and provides links to Internet locations where additional information can be found on each topic. This issue includes updates on activities of FASB, GASB, AICPA, SEC, PCAOB, and IASB. You will find links to all past issues Here.

CESR seeks comments on financial information in prospectuses

28 Jun 2004

The Committee of European Securities Regulators (CESR) has invited comments on its draft recommendations on the content of prospectuses, including both financial and non-financial information.

CESR's proposed recommendations on historical financial information cover selected financial information, operating and financial review, capital resources, profit forecasts or estimates, restatements of historical financial information, pro forma financial information, financial data not extracted from issuer's audited financial statements, interim financial information, working capital statements, and capitalisation and indebtedness. CESR notes that "the purpose of the recommendations is not to provide interpretations of IAS/IFRS or Member States' local GAAP but to clarify certain disclosure requirements included in [EU Prospectus Regulation No. 809/2004] where necessary." Comments are due 18 October 2004. Click for:

IASCF constitution review hearing tomorrow in London

28 Jun 2004

The constitution committee of the IASC Foundation will hold its second public hearing in connection with its current Review of the Foundation's Constitution tomorrow in London.

Details about the hearing may be found on the IASB Website.

IAS 33 e-learning module is now available

26 Jun 2004

The new e-learning module for IAS 33 Earnings per Share has been added to the 20 other modules available in Deloitte's popular IFRS e-Learning programme.

You can access all available modules by clicking the IFRS e-Learning 'light bulb' on the IASPlus home page or by clicking Here. Deloitte is making our IFRS e-Learning programme available in the public interest without charge.

New Australian Accounting Alert

26 Jun 2004

We have posted (PDF 57k), Applicability of AASB 1046 'Director and Executive Disclosures by Disclosing Entities' to Managed Investment Schemes.

You can download all past Alerts Here.

First independent chair of IAASB advisory group

26 Jun 2004

David Damant, a member of the IASB's Advisory Council and the IASB's SME Advisory Panel, has been appointed to be the first independent chairman of the Consultative Advisory Group (CAG) to the International Auditing and Assurance Standards Board (IAASB).

Click for IFAC Press Release (PDF 61k).

New Accounting Alert from New Zealand

25 Jun 2004

We have posted (PDF 181k).

This issue addresses recent New Zealand exposure drafts of equivalents of IAS 30 and IAS 31, several recent IASB exposure drafts, IFRIC D6, exposure drafts of a proposed preface to New Zealand accounting standards and New Zealand Framework, and the process for developing accounting standards in New Zealand. Past Alerts can be found Here.

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