Local view for "http://purl.org/linkedpolitics/eu/plenary/2000-06-13-Speech-2-190"
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"en.20000613.15.2-190"2
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"Mr President, the Commission approved a communication a moment ago which forms an essential part of the financial services action plan. The capital markets within the European Union display a lack of comparability with regard to the annual accounts published by listed companies. This leads to an increase in the capital cost for companies and presents a considerable obstacle in the establishment of an efficient European Union capital market with the best possible capital allocation.
In its communication, the Commission proposes to completely overhaul this situation. By no later than 2005, all listed companies will be required to compile their consolidated annual accounts on the basis of International Accounting Standards (IAS). This is a major change which directly impacts on approximately seven thousand companies. These International Accounting Standards are being developed by an organisation from the private sector, namely the International Accounting Standards Committee.
The European Union has no control whatsoever over this organisation, even though various Europeans are actively involved in the work of the IASC. It is therefore necessary, both politically and legally, for standards approved by the IASC to gain official recognition from a mechanism set up within an EU context. This mechanism must be pro-active in providing input to the IASC in order to establish new standards. After approval of a standard by the IASC, it has to give its verdict on the appropriateness of this standard for financial accounting in the European Union. This EU approval mechanism will comprise a political and technical aspect. The technical aspect will consist of representatives of the key groups which are closely involved in the problems of financial accounting. This is mainly the compilers and users of annual accounts, i.e. the bodies which are responsible for establishing standards in the field of annual accounting in the different Member States and the profession of accountant too, of course.
The political aspect will encompass all Member States. How it will take shape exactly is still to be decided on. More specifically, thought will be given to how the European Parliament can be involved in the decision-making process. It is, of course, crucially important that the standards also be applied correctly in practice. This requires close cooperation between the Member States and between the authorities responsible for supervision on the capital market.
Finally, it is also important that the existing European annual accounts directives, which apply to approximately three million joint stock companies, be modernised in order to accommodate the new developments in financial accounting. The pressure exerted by the markets and Member States to make the necessary changes to the legislative framework as soon as possible is considerable. This is why the Commission will be presenting a draft directive or draft regulation as early as the autumn, which will formally set the legislative process in motion. This proposal will also contain transitional measures which will help to ensure that listed companies switch to the International Accounting Standards for their annual accounting as soon as possible and certainly by no later than the year 2005."@en1
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