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German Institute opposes EU IFRS suspension

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07 Nov 2008

The Institut der Wirtschaftsprufer (the IDW, which is the German professional institute of registered auditors) has written to EU Commissioner for Internal Markets Charlie McCreevy strongly urging that the European Commission oppose any political move to seek a partial or full suspension of any IFRSs.

p>In anticipation of the G20 Summit Meeting in Washington on 15 November 2008, the EU will have a summit of EU leaders today. The IDW is concerned that at both the EU summit and then the G20 summit, there will be political pressure on national leaders to discuss, and possibly make decisions on, technical accounting standards issues that should be addressed by the IASB. Click to download the IDW letter (PDF 395k). Here is an excerpt:

The enclosed article from the Financial Times newspaper dated November 3, 2008 infers that the French Government intends, given the current crisis experienced in financial markets, to propose that the application of International Financial Reporting Standards in the European Union be debated at the forthcoming EU summit on November 7, 2008. We have not been able to establish the accuracy of this reported information. However, we have heard, from more than one source, of rumours that the French government may be intending to seek a partial or even full suspension of specific requirements of the Regulation (EC) No 1606/2002 of the European Parliament and of the Council of 19 July 2002 on the application of international accounting standards (lAS Regulation). Such a move would mean that companies listed on the European stock markets would no longer be required to fully apply IFRS.

We would like to request you to ensure that the EU Commission resists any attempts to introduce such measures, were they to be put forward. The original aim of the lAS Regulation, to require financial reporting by companies listed on capital markets in Europe to be transparent and to be internationally accepted, as a measure to ensure the competitiveness of the capital markets in Europe, remains just as valid today. The complexity of the interrelationships between capital markets globally means that it is essential that capital market participants receive consistent information, to facilitate meaningful comparison, and thus it is essential that unified financial reporting principles be applied.

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