US and Japanese firms listed in European Union can continue filing accounts under home rules and avoiding costly changes, the European Commission announced today.

The European Union executive body said US and Japanese accounting rules known as GAAP, can be considered equivalent to the International Financial Reporting Standards (IFRS) used by the EU's 8,000 listed companies.

The move is aimed at helping the EU bourses such as London Stock Exchange and Deutsche Böerse compete better with US rivals.

Chinese companies will also be allowed to continue filing accounts using their home accounting standards but there will be a review of how this works in practice.

The Committee of European Securities Regulators, made up of securities watchdogs from the 27 EU states, advised the Commission last month to delay deciding on whether Chinese accounting rules were equivalent to IFRS.

The European Commission said that firms from Canada and South Korea should also be allowed to file statements until 2011 using their own accounting rules and the executive will make formal proposals to this effect.

Further reading:

SEC scraps IFRS-GAAP reconciliation rule