EC adopts an 'equivalence mechanism' to assess non-EU GAAPs
10 Jan 2008
Following a favourable opinion of the European Parliament, the European Commission has adopted Regulation (EC) No 1569/2007 that sets out the way in which the Commission will assess the equilvalency of 'third-country' (non-EU) GAAPs to IFRSs as adopted by the EU.
Equivalence definition: The GAAP of a third country may be considered equivalent to IFRS adopted pursuant to Regulation (EC) No 1606/2002 if the financial statements drawn up in accordance with GAAP of the third country concerned enable investors to make a similar assessment of the assets and liabilities, financial position, profit and losses and prospects of the issuer as financial statements drawn up in accordance with IFRS, with the result that investors are likely to make the same decisions about the acquisition, retention or disposal of securities of an issuer. |
Special provisions through 31 December 2011: The regulation provides that for a limited period ending 31 December 2011, the Commission may continue to accept non-EU GAAPs that are not currently deemed equivalent to IFRSs as adopted by the EU if either:
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- Equivalence Regulation (EC) No 1569/2007 as Adopted (PDF 45k)
- Press Release (PDF 83k)
- Frequently Asked Questions about Equivalence (from the EC) (PDF 103k)