EC financial reporting strategy

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02 Dec 2005

Charlie McCreevy, the European Commissioner for Internal Market and Services, spoke about the EC Strategy on Financial Reporting: Progress on Convergence and Consistency at the European Federation of Accountants' (FEE) Seminar on International Financial Reporting Standards in Brussels on 1 December 2005. Here is an excerpt: It is my firm belief that accounting standards should be international and be used across the globe.

We have committed to use IFRS, but other important markets – notably the US – have not yet done so.

Our interest in the acceptance of IFRS in the US is of course not purely altruistic. Today there about 250 EU issuers listed in the US using IFRS. The cost of the current US GAAP reconciliation requirement is enormous. I have heard estimates of between 1 and as much as 10 million dollars for the largest companies. And that is every year. But the story does not end here. There are many companies from other jurisdictions who also have US listings and use IFRS.

That is why I think my agreement earlier this year with the former SEC Chairman, Bill Donaldson, and the SEC roadmap to remove the US GAAP reconciliation requirement is so important. This Roadmap means that IFRS could be accepted in the US no later than 2009, or even sooner.

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