On December2, the Federation of European Accountants (FEE) and the Association of Chartered Certified Accountants (ACCA) held a joint roundtable to discuss the report by Mr Maystadt and his preliminary recommendations regarding the adoption of International Financial Reporting Standards (IFRS). Of importance in the debate with EU Stakeholders was the question whether the adoption system was effective and would enable the EU to play its full role in discussions on the matter, since implementation issues will have to be resolved when and if the proposals are implemented.
After presenting his final recommendations at the ECOFIN Council meeting on 15 November 2013, Mr Maystadt consulted a panel of experts to address issues such as how to reinforce the EU's contribution to IFRS and how to improve the governance of the current EU structures in the field of financial reporting and accounting.
Jella Benner- Heinacher - EuroFinUse’s Vice President - questioned the adoption of flexible endorsements and the current binary approach. She noted that such flexibility would make it harder to reach truly ‘global’ standards and would reduce comparability within the EU as well as among EU listed entities and their global peers. She added that this is clearly contrary to the goal of global standards.
Mr Maystadt is of the opinion that the present standard-by-standard approach remained adequate and that this approach balanced EU sovereignty with a commitment to maximum harmonisation in financial reporting standards. He noted that, should the European Commission figure that it was desirable to have the possibility of a carve-in/carve-out, the bar should be set high and be accompanied by the need for a qualified majority vote in the Council. He further pointed to the proposed additional endorsement criteria: that an IFRS ‘should not endanger financial stability’ and that it ‘must not hinder the economic development of the Union’.
Mr. Maystadt had the opportunity to discuss his proposals in relation to the Accounting Regulatory Committee (representing Member States at a political level) and the role of the European Parliament. His report emphasizes that both institutions should be involved earlier than at present and specifically be engaged by EFRAG on a regular basis when IFRS-related projects are concerned. According to him, his proposals were given the ‘green light’ by ECOFIN, with some specific tasks given to the Commission for clarification. While many of the proposals can be implemented without legislative measures, any alternation of the IAS Regulation’s endorsement criteria would need legislative time.
Please find Jella Benner-Heinacher's contribution at the FEE and ACCA joint roundtable here.
Please find Mr. Philippe Maystadt full report here.