This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

Draft report on the IAS evaluation and on activities of IFRS Foundation, EFRAG and PIOB

  • European Union Image

14 Jan 2016

The Committee on Economic and Monetary Affairs (ECON) of the European Parliament has made available a draft report on IAS evaluation and on activities of IFRS Foundation, EFRAG and PIOB. The report includes a motion for a European Parliament resolution.

The report states that the International Financial Reporting Standards (IFRS) are "essential for the efficient functioning of the internal market and of the capital markets", are considered a European "public good", and "strengthen accountability by reducing the information gap between investors and companies, protecting investment and bringing transparency through enhancing the international comparability and quality of financial information and enabling investors and other market participants to make informed economic decisions, and therefore influence the behaviour of actors in financial markets and impact the stability of these markets".

Of the individual points made in the report, especially the following deserve to be mentioned.

The European Parliament:

  • welcomes the European Commission’s IAS evaluation report on the application of the IFRS in the EU and its assessment that the objectives of the IAS Regulation have been met;
  • calls on the Commission to put forward proposals on how the Maystadt recommendation regarding expanding the ‘public good’ criterion will be taken into account during the endorsement process and urges the Commission, together with EFRAG, to issue clear guidelines on the meaning of the ‘public good’ and the ‘true and fair view’ in order to arrive at a common understanding of these endorsement criteria;
  • welcomes the intention of the IASB to reintroduce the principle of ‘prudence’ and re-inforce ‘stewardship’ in the new Conceptual Framework;
  • notes that the effects of an accounting standard must be fully understood and insists that it should be a priority for the IASB and EFRAG to strengthen their impact analyses and to assess the specific needs of investors and companies;
  • is concerned about the complexity of the IFRS and calls for this complexity to be reduced whenever appropriate and possible when developing new accounting standards;
  • believes that a healthy dialogue should continue between the IASB and the US accounting standards setter, despite the slow progress of the convergence process;
  • welcomes the intention of the Commission to explore with the IASB the possibility of developing common high quality and simplified accounting standards for SMEs which could be used at EU level by SMEs listed on Multilateral Trading Facilities (MTFs);
  • supports the Commission in urging the IFRS Foundation to ensure that use of the IFRS and the existence of a permanent financial contribution are conditions for membership of the governing and monitoring bodies of the IFRS Foundation and of the IASB;
  • welcomes the EFRAG reform which took effect on 31 October 2014 and calls on the Commission to propose the extension of the Union Programme for EFRAG for the period 2017-2020.

If the motion gets passed by Parliament, the President will be asked to forward the resolution to the Council and the Commission. Please click to access the full draft report on the Parliament's website.

Related Topics

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.