Commission Welcomes Directive To Modernise Accounting Rules

The European Commission has welcomed the definitive adoption of a Directive amending the European Union Accounting Directives, following its approval by the EU’s Council of Ministers. The changes, approved by the European Parliament in January 2003 bring existing EU rules into line with current best practice. They complement the International Accounting Standards (IAS) Regulation, adopted in June 2002, that requires all EU companies listed on a regulated market to use IAS from 2005 onwards and allows Member States to extend this requirement to all companies. The amendments allow Member States which do not apply IAS to all companies to move towards similar, high quality financial reporting, and could therefore affect up to five million companies. They provide for appropriate accounting for special purpose vehicles, improve the disclosure of risks and uncertainties and increase the consistency of audit reports across the EU. Internal Market Commissioner Frits Bolkestein said, ‘ This Directive demonstrates Europe’s commitment to transparent, high quality financial reporting, consistently applied across the EU. Shareholders, potential investors and the public need to know from companies’ accounts exactly how well they are performing and to be able to compare like with like. ‘


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