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IFRS update — Austria

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30 Jul 2003

An update about IFRS in Austria as of July 2003.

Most Austrian Listed Companies Have Already Switched to IFRS

For the past three years, the Vienna stock exchange has required all domestic and foreign companies listed on the A-Market and the Austrian Growth Market (AGM) to submit consolidated financial statements under either IFRS or US GAAP. Other listed companies have been permitted to use IFRS or US GAAP or the Austrian commercial code. In their 2002 financial statements, nearly all listed Austrian companies have used IFRS. Only a few are now using US GAAP or the Austrian code. Starting in 2005, virtually all listed European companies, including Austrian companies, will be required to use IFRS.

Fair Value Guideline of EU

In February 2003 a draft of the Austrian 'Fair Value Bewertungsgesetz' was issued, which is meant to bring the Austrian Commercial Law in line with the EU Guideline. Under this regulation, fair value estimates may only be included in consolidated financial statements based on IFRS. A mark-to-market valuation in the individual financial statements or consolidated financial statements based on Austrian GAAP is currently not permitted, as important tax and company law issues still have to be discussed.

Provisions for Severance Payments

Based on the 'Betriebliche Mitarbeitervorsorgegesetz': The old regulation under which a company has to pay severance payments when an employee leaves the company (in special cases) is changed to a model where contributions (1.53% of the monthly remuneration) are paid by the employer to a special fund (Mitarbeitervorsorgekasse). This is due for those employees whose contracts have been signed after December 31, 2002. Therefore no severance provision has yet to be recognised for these contracts.

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.