Local view for "http://purl.org/linkedpolitics/eu/plenary/2001-05-03-Speech-4-052"
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"en.20010503.4.4-052"2
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"May I reply as follows to the two interventions made, and in particular to the rapporteur. As you may know, accounting is a European invention. Five hundred years ago, Mr Lucia Patchioli, an Italian monk, developed the fundamentals of book-keeping which are still used today. However important historic awareness may be, becoming historical is generally not a very positive notion. This is what accounting in the European Union should not become.
Secondly, the proposal also lays down rules for Member States to define the scope of companies that shall be permitted or can be required to use fair value. A Member State can, for example, permit or require fair value only for listed companies.
Thirdly, the proposal also requires that all companies disclose information on derivative financial instruments – options, swaps, futures – in the notes on the accounts which may have a significant impact on the financial position. However, small companies can be excluded from this disclosure.
One of Parliament's amendments seeks to include banks within the scope of the proposal. The Commission supports this amendment from the point of view of a single EU market. Banks and other companies compete for capital on the same capital market. Comparable financial statements are a crucial element allowing an efficient allocation of capital to companies and ensuring sufficient investor protection. The Commission carefully examines the amendments to its proposal and, in this instance, supports all proposed Amendments Nos 1 to 32.
In conclusion, I hope that Parliament and the rapporteur will contribute to prevent accounting in the EU becoming historical. We want it to be up-to-date and forward-looking.
The basic directive which deals with accounting, the fourth company law directive, is now more than twenty years old – it dates from 1978 – and although the directive forms a sound basis for accounting in the EU, it is hard to neglect substantial changes in business practices: capital markets, futures, stock options, leases, the Internet and the euro are all phenomena that, for the most part, did not exist in 1978.
Indeed, accounting has evolved to reflect these changes in business practice. In 1995, the Commission started to be actively involved in the work of the International Accounting Standards Committee. This involvement was concluded by the recently proposed regulation on International Accounting Standards (IAS), which I hope to discuss with this Parliament shortly.
At the moment, the Commission is also preparing to update the accounting directives: we will be presenting a proposal before the end of this year, as outlined in the Commission's communication on financial reporting in the European Union.
If you hear me talking about the proposed regulation and the modernisation of accounting directives, you may wonder why we need this proposal amending the accounting and bank accounts directives, thereby enabling the use of fair value for certain financial instruments. Why do we need that proposal at all?
In recent years several Member States have introduced national legislation that allows their companies to use International Accounting Standards. However, Member States cannot enact national laws that are not compliant with EU legislation, so IAS can only be applied to the extent that there are no conflicts with the accounting directives.
The fair-value concept, introduced in IAS, constitutes such conflicts and the proposal takes that conflict away by introducing fair value into the accounting directives.
without this proposal, companies which at present use IAS could no longer do so when, from the financial year 2001, fair value becomes mandatory under IAS.
I should like to point out that the introduction of fair value in the accounting directives is in strict alignment with International Accounting Standards and does not allow the use of fair value beyond that.
Accounting is a technical and perhaps even esoteric issue. Nevertheless, it is important to highlight the most important elements of this proposal. The proposal defines fair value and those financial instruments that can be fair-valued in accordance with IAS."@en1
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"A contrario"1
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