EC to accept third-country GAAP

News Article - 10 January 2008
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The European commission (EC) has adopted a new set of rules to establish the equivalence of non-European accounting standards to International Financial Reporting Standards (IFRS).

Announced on Tuesday, "third-country" Generally Accepted Accounting Principles (GAAP) will now be considered adequate if financial statements still detail assets, liabilities, profit and losses, financial position and prospects of the issuer in a similar way to IFRS.

If non-EU GAAP is submitted - either by request or on its own initiative - and accepted, foreign businesses would then be permitted to continue issuing statements under the non-EU GAAP without reconciling it to IFRS.

EU internal market and services commissioner Charlie McCreevy commented: "This is a crucial milestone towards our objective of promoting the efficiency of capital markets by establishing a common worldwide accounting language."

The US Securities and Exchange Commission announced in November that US-listed foreign companies would no longer have to reconcile their financial statements filed under IFRS to GAAP.

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