PracticeConsultingEU set to adopt global rules by 2005

EU set to adopt global rules by 2005

The European Commission is setting itself the deadline of 2005 for companies to adopt global accounting standards following increased interest of major companies.

Karel van Hulle of the European Commission said: ‘A large group of companies in Europe have said it wants Europe to move towards IAS. This is a big step.’

The EU says it needs the next five years to prepare for IAS because of the differences in procedures and laws between the 15 member states, despite a core set of 30 rules having been recently endorsed as the world benchmark by Iosco, the international group of stock market regulators.

‘It is not possible to just endorse IAS in Europe,’ said van Hulle, referring to the differing legal and regulatory systems within Europe. ‘The European Union wants to adopt global standards, but we need time,’ van Hulle told the IFAC conference last week.

However, Van Hulle, who has been instrumental in preparing Europe for the adoption of IAS since 1995, put his full support behind the internal restructuring of the International Accounting Standards Committee. But, he said he hoped IASC would take into account Europe’s needs as well.

The IASC is now an independent body governed by a board of 19 trustees.

The EU is currently consulting with its 15 member states to find out how they operate in order to forge a path towards harmonising procedures and standards. Seven member states already allow some or all companies to prepare accounts in accordance with international standards.

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