PracticeConsultingVolkswagen to choose between international standards and US GAAP as it abandons harsh German system

Volkswagen to choose between international standards and US GAAP as it abandons harsh German system

Europe's largest carmaker, Volkswagen, is planning to adopt International Accounting Standards or US GAAP as early as 2001 in an attempt to become more shareholder-friendly.

The plan is expected to enhance VW’s reported profits and bolster its share price, the Financial Times reported today.

It said that the planned change follows mounting criticism among institutional investors of VW’s disclosure and communcation policies.

VW’s chief financial officer, Bruno Adelt, said one possible time the company could change its accounting standards was next year when the company changed over to the euro.

Harsh German accounting standards allow companies to understate their earnings using measures such as rapid depreciation of their assets, heavy provisions and low valuation of assets and liabilities.

Review of 1999: STANDARDS

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