CESR recommendations on financial reporting

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03 Jul 2005

The Committee of European Securities Regulators (CESR) has published its Final Technical Advice on Possible Implementing Measures of the Transparency Directive.

Matters covered by CESR's recommendations include:

  • Half-yearly reporting. CESR proposes that the minimum content of half-yearly financial statements not prepared in accordance with IFRSs should be defined by reference to the principles of IAS 34 Interim Financial Reporting. Further, CESR proposes that in half-yearly reports, the definition of 'related party transactions' in IAS 24 Related Party Disclosures should apply both when an issuer prepares consolidated accounts and when it does not.
  • Equivalence of third countries' disclosure requirements. This part of the paper develops the concepts that CESR will use to establish equivalence. CESR's intends to test equivalence by (a) looking first at the key principles and objectives of the different disclosure requirements of the EU Transparency Directive and then (b) establishing what a third country's framework has to include in order to be deemed to be equivalent. CESR notes that "the requirements of the third country do not need to be identical; equivalence can be declared when general disclosure rules provide investors with understandable information which will lead to a broadly equivalent assessment of the issuer's position."
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