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EU Parliament resolution on procedure for endorsing IFRSs

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21 Nov 2007

In November 2006, the European Parliament amended the process for endorsing IFRSs for use in Europe by adding a new step that requires the European Commission to submit its endorsement proposals to a Committee of the Parliament, known as the Regulatory Procedure with Scrutiny Committee.

At its meeting last week, the Parliament considered whether to give the Commission the authority to decide on the applicability of IFRSs "in exceptional and duly justified cases and on imperative grounds of urgency" without the normal 'regulatory procedure with scrutiny' methodology, that is, to allow IFRS endorsements without involvement of the Parliament itself. The Parliament decided not to give the Commission this authority. Instead, the resolution adopted by the Parliament called on all parties to act expeditiously on endorsements. Here is the Parliament Resolution (PDF 110k). An excerpt:

In view of the fact that the application of the regulatory procedure with scrutiny within the usual deadlines could in certain exceptional situations make it difficult to adopt newly issued accounting standards, amendments to existing accounting standards or interpretations of existing accounting standards in time for them to be applied by companies for the relevant financial year, the Commission, the Council and the European Parliament should act speedily in order to ensure that those standards and interpretations are adopted in a timely manner so as not to undermine investor understanding and thus confidence.

Regulation (EC) No 1606/2002 [the EU IAS Regulation] should therefore be amended accordingly,

 

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