EU accession states ahead on IFRS learning curve

EU accession states ahead on IFRS learning curve

Listed companies in the 10 states due to join the European Union next month could gain an advantage from the EC's decision to move to international accounting standards in 2005.

Link: IAS special report

Many of the companies in former Soviet-block countries, such as the Czech Republic, Estonia and Poland, are ahead of their counterparts in more established EU nations in their conversion to international financial reporting standards, due to the poor accounting systems with which they were previously forced to work.

‘In many of the accession states there was not a developed accounting framework. In the absence of this, companies in these countries have been adopting IFRS. It has made it much easier to shift towards IFRS in totality,’ said Ian Wright, senior partner at PricewaterhouseCoopers’ global corporate reporting group.

‘A lot of people in more established European countries have shut their eyes to the issue of IFRS and are now starting to panic,’ said Simon Thompson, head of corporate development for ACCA’s Central and Eastern Europe office.

‘In the accession states, everybody has had to change their mindset and IFRS has just been part of that.’

But while listed companies in such nations should at least enjoy a state of competitiveness with companies in other EU countries, the same cannot be said for private companies.

‘Those who haven’t moved may find significant barriers to cross-border trade. Their accounts will be difficult for others to understand, which will lead to credit risk and insurance issues,’ said Wright.

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata
Professional Services

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine
Accounting Firms

Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021
Making Tax Digital

Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource