By 2005 all publicly listed European companies will be using a set of global accounting rules developed by the International Accounting Standards Board. But all non-listed companies in the 15 member states will continue to use domestic accounting rules.
Karel van Hulle, head of financial reporting and company law at the European Commission, said: ‘Unless IASB deals with this as soon as possible we will have 15 different regimes. We will help and make sure the issue remains a priority.’
The EU is striving to get rid of all the different accounting regimes within the EU to make it easier for investors, users and preparers of accounts, to improve comparability and ultimately lower the cost of capital so that European markets can compete effectively with the US.
‘If we create fluid markets in Europe then companies won’t need to go to the US to raise capital. US companies will come here,’ he told Accountancy Age.
‘Europe has the potential in every way to be a great economic power,’ added van Hulle.
In response to van Hulle’s call, Geoffrey Whittington, UK liaison board member at the IASB, said: ‘We’ve got to get the big GAAP sorted before we deal with the smaller companies.’
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