EC And SEC Reach 'Roadmap' Agreement On Financial Reporting Standards

by Glen Shapiro, LawAndTax-News.com, New York

25 April 2005

In a meeting held in Washington on Friday in the context of the EU-US Financial Markets Regulatory Dialogue, top officials of the European Commission and the US Securities & Exchange Commission (SEC), reached agreement on a ‘roadmap’ toward equivalence between International Financial Reporting Standards (IFRS) and US Generally Accepted Accounting Principles (GAAP).

The roadmap sets out steps that the SEC will take to eliminate the need for companies using IFRS to reconcile to US GAAP standards possibly as soon as 2007, but no later than 2009.

Heading the European delegation, Internal Market Commissioner, Charlie McCreevy welcomed the agreement.

“Today’s announcement is a sign of our common interest in reducing regulatory burden and related costs on business. I came here to promote the better regulation dialogue between the EU and the US. What we have announced today shows that we can achieve real progress through such constructive dialogue,” he observed on Friday, continuing:

“I very much welcome the constructive approach the SEC is taking to moving these critical issues forward. We will work closely together to promote the closer alignment of IFRS and US GAAP and towards the elimination of US GAAP reconciliation requirements for foreign private issuers. These are major steps towards high-quality global accounting standards, which the European Union strongly supports.”

Mr McCreevy went on to reveal that in order to ensure that the project maintains its momentum, he will be meeting with SEC chairman, William Donaldson next year to conduct a progress review.

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