Italian IFRS law ‘not a no-confidence vote’

RECENT LEGAL changes in Italy do not indicate waning enthusiasm for International Financial Reporting Standards, according to a local expert.

One interpretation of the amended law was that use of IFRSs for the financial statements of listed companies would have to be endorsed on an individual basis by the Italian Ministry of Justice; one observer said this betrayed concern over how the global standards would affect national interests.

However, Mara Cameran, accountancy school researcher at the University of Bocconi in Milan, said that rather than requiring endorsement, the new rule simply allows for a situation in which the ministries of justice and finance, together with standard setters and the national bank, may issue recommendations about IFRS applications in order to ensure compatibility.

Cameran said the implications for financial report users and preparers “is not significantly relevant”, saying: “The main aim of the law seems to be a better integration of international accounting standards in the Italian context because … [IFRS] could not immediately be a good fit for all the countries involved.”

Technical accountant Kathryn Cearns echoed Cameran’s statement, suggesting that the law is more an expression of local bureaucracy than IFRS-related concerns.

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Fiona Westwood of Smith and Williamson.