The European Commission has adopted Commission Regulation (EC) No 1569/2007 of 21 December 2007 establishing a mechanism for the determination of equivalence of accounting standards applied by third country issuers of securities pursuant to Directives 2003/71/EC and 2004/109/EC (the Regulation).
The Regulation sets out which third-country Generally Accepted Accounting Principles (GAAPs) can be found equivalent to International Financial Reporting Standards (IFRS) which are adopted by the EU. The Commission, using the definition of equivalence and the mechanism established by the Regulation, can present proposals on which third country GAAPs should be accepted as equivalent with effect from 2009. The Commission will also be entitled to allow third country issuers to use their GAAPs in the EU for a transitional period ending in 2011 at the latest, provided these countries are converging with IFRS or the respective third country intends to adopt IFRS. Through these decisions, foreign issuers listed in the EU will be allowed to continue preparing their accounts using their GAAP instead of having to restate their financial statements using IFRS.
View Commission adopts an equivalence mechanism in relation to third country GAAPs, 8 January 2008