EU ambassador to USA says convergence is 'urgent'

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04 Sep 2005

In (PDF 42k), John Bruton, Ambassador of the European Union to the United States of America, described as 'urgent' the need to remove accounting standards differences and other inefficiencies and frictions caused by differing regulation in different jurisdictions.

An excerpt:

Cooperation between regulators and supervisors is not only necessary, it is essential. We aim not at harmonisation, but at fundamental equivalence and at mutual recognition.... Up to now, European companies listed in the US have had to reconcile their IFRS accounts to US GAAP. In a world where two sets of acceptable standards exists, this is unsatisfactory. Companies which are already publishing their accounts to one high-class standard have then to reconcile them expensively to another equally high-class, but different, standard. For some European companies raising capital in the United States, this cost has been estimated at between US $5 and $10 million per annum. The IASB and the FASB are engaged in a process of converging the two standards over time. And the European Commission and the SEC are working with these two institutions to ensure that convergence programme has a clear timetable, clear objectives and is transparent to all stakeholders. This is urgent.

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