Following unanimous consent of Member States, the Commission has adopted amendments to accounting standards. The amendments are intended to mitigate the consequences of the volatile financial markets and to ensure that European companies have the same flexibility as their US counterparts to reclassify assets held-for-trading into the held-to-maturity category. These changes will apply from the third quarter of 2008.
The Commission has also decided to adopt the consolidated text of all International Financial Reporting Standards (IFRS) in force in the EU. This will simplify and dramatically reduce the administrative burden on EU businesses.
The International Accounting Standards Board has published guidance on the application of fair value measurement when markets become inactive, and this has been welcomed by the Commission. Like other recent changes this puts the EU on a “level playing field” with the US.