RegulationAccounting StandardsFRC chief warns of EU ‘breakaway’

FRC chief warns of EU 'breakaway'

European Union move to establish a breakaway version of international accounting standards could undermine efforts to converge IFRS with US GAAP warns FRC chief executive

european flag

The UK’s top accountancy regulator has said that there are moves underway in
the European Union looking to establish a breakaway version of international
accounting standards, a move that could undermine efforts to converge IFRS with
US GAAP.

Paul Boyle, chief executive of the
Financial Reporting
Council
, who is stepping down in November, warned that such a move would
also have serious repercussions in the US, as foreign issuers would have to iron
out the differences between IFRS-compliant accounts and US GAAP.

‘I think there’s a serious risk of this,’ said Boyle. ‘We’re not just
imagining it.’

Speaking to Accountancy Age TV, Boyle warned that any EU action
would undo significant progress to align US and European accounting. Boyle is
stepping down later this year after FRC efforts to deal with one of the most
turbulent periods in the history of companies, standard setters and the
profession.

‘I’m hopeful that the EU will pull back from the brink,’ he said. ‘It would
be a big step backwards. Also the requirement for non-reconciliation [of IFRS to
US GAAP for foreign issuers] is dependent on the IASB’s version of IFRS. The SEC
would reimpose the very costly reconciliation.’

The FRC noted last week the recent increase in political pressure on both the
IASB and Financial Accounting Standards Board.

‘[The FRC continues] to have significant concerns that the EU might adopt its
own version of IFRS rather than the standards as published by the IASB,’ Boyle
said in the reporting watchdog’s annual report last week.

Related Articles

Sports Direct implements FRC corrections in annual reporting

Accounting Standards Sports Direct implements FRC corrections in annual reporting

1y Stephanie Wix, Writer
Former CFO joins IASB board

Accounting Standards Former CFO joins IASB board

1y Stephanie Wix, Writer
Cashflow statement improvements targeted by watchdog

Accounting Standards Cashflow statement improvements targeted by watchdog

1y Stephanie Wix, Writer
FRC expects Brexit narrative within annual reports

Accounting Standards FRC expects Brexit narrative within annual reports

1y Stephanie Wix, Writer
FRC consults on approach to updating FRS 102 for changes in IFRS

Accounting Standards FRC consults on approach to updating FRS 102 for changes in IFRS

1y Richard Crump, Writer
IASB issues amendments to insurance contracts standard

Accounting Standards IASB issues amendments to insurance contracts standard

1y Richard Crump, Writer
LAPFF urges FTSE 350 companies to disregard the FRC

Accounting Standards LAPFF urges FTSE 350 companies to disregard the FRC

1y Richard Crump, Writer
FRC proposes changes to FRS 101

Accounting Standards FRC proposes changes to FRS 101

1y Richard Crump, Writer