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European internal Market and Services Commissioner McCreevy called Thursday’s unanimous vote “a crucial decision” and a “historic step” by the SEC on the road towards global accounting standards.

“I have congratulated SEC chairman Cox for this decision which will benefit EU companies with a US listing. This decision is taken less than two years after Cox and I affirmed our commitment to a roadmap to do away with costly reconciliations between US and EU accounting standards,” he added.

He said that the strategy the European Union had been pursuing with its US counterparts strides towards one global accounting language in the last few years was bearing fruit and that many more countries were likely to follow.

Accountability 

McCreevy said that the next step in this strategy is to have a close look at the overall standard setting process by the IASB. He said that the European Commission will continue to work with the IASB and its international partners to build on the success of IFRS by enhancing the governance of the IASB, including its accountability to all stakeholders.

The EU was the first major jurisdiction to make IFRS mandatory for its listed companies and it remains by far the largest jurisdiction applying IFRS. McCreevy said that this was from the outset part of a policy to arrive at a single set of global accounting standards for listed companies. A key objective of this strategy was the acceptance by the SEC of financial statements prepared by EU issuers without requiring any reconciliation to US GAAP.

Enhance transparency 

The European Commission recently issued a joint statement with the US SEC, the Japanese Financial Services Agency and IOSCO announcing reforms of the overall governance of the IASB and its parent entity, the International Accounting Standards Committee (IASC) Foundation.

The statement foresees, among other requirements, measures to enhance the transparency and due process of the IASB’s standard-setting process. The EU commissioner said that this is part of a broader strategy to ensure that the IASB’s standards can be fully endorsed in the EU and that the existing carve-out concerning hedging rules can be removed.

Related articles

• SEC drops IFRS-GAAP reconciliation
  
• FASB and FAF call for delay to IFRS-GAAP deal
• Regulators call for stronger IASC
• GAAP to be dropped early for EU firms

Related links

• US Securities and Exchange Commission
• European Commission
• EU - Accounting