London given two years to comply with accounting standards

News Article - 09 June 2009
Category: Regulatory

Companies listed on the London Stock Exchange (LSE) have been given two years to comply with European accounting standards.

The government made the decision, which will be announced to investors in Japan today, the Guardian reports.

Ed Balls, the economic secretary to the Treasury, is to say: "Europe was in danger of applying rules in a way which would have made our markets less attractive to non-EU countries, especially the US and Japan, for the sake of an artificial timetable on convergence."

Mr Balls will tell the audience that the time-span, which was agreed to by the European Commission, will be beneficial for London and the foreign businesses which list on the exchange, as well as promising to give local authorities in the capital powers to stop American-style regulations being imposed should the LSE be taken over.

The delay before standards are implemented is to enable the proceeding of convergence at "an appropriate pace, avoiding disruption to markets", the paper reports.

A principles-based approach to accounting standards was earlier called for by chairman of auditor KPMG, Michael Rake, who added that international and American standards should converge.

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