PracticeConsultingEurope gives go ahead to IASs

Europe gives go ahead to IASs

The European Union Council yesterday ratified in one sitting proposals which pave the way for international accounting standards to be used by Europe's 7,000 listed companies.

Last year the European Commission gave the International Accounting Standards Board a major boost when it put forward plans to allow listed companies to use IASs in consolidated accounts by 2005 at the latest.

The amendments affect the fourth EU directive for annual accounts, the seventh directive for consolidated accounts and the Bank Accounts directive. Under the new law, companies will now be able to apply IAS 39 (Financial Instruments) without legal conflicts. IAS 39 uses market values or fair value accounting of financial instruments, meaning that all gains and losses will have to be put on the profit and loss account.

Some EU member states already have legal provisions to allow listed companies to apply IASs. But, other member states, including the UK, will now have to write the amended directive into national law to pave the way for the EU 2005 deadline.

Moves to adopt IASs were stepped up last year when Iosco, the club of global stock market regulators, endorsed a core set of global accounting standards to be used by companies in cross border listing.

Links

EU media release

IASB website

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