Commission Regulation (EC) No 1289/2008 of 12 December 2008 amending Commission Regulation (EC) No 809/2004 implementing Directive 2003/71/EC of the European Parliament and of the Council as regards elements related to prospectuses and advertisements (Text with EEA relevance)
Date: 2008-12-12
Institutions: European Commission
Subjects: approximation of laws, dissemination of information, publication, sales promotion, securities, stock-exchange listing

19.12.2008

EN

Official Journal of the European Union

L 340/17

COMMISSION REGULATION (EC) No 1289/2008

of 12 December 2008

amending Commission Regulation (EC) No 809/2004 implementing Directive 2003/71/EC of the
the Council as regards elements related to prospectuses and
European Parliament and of

advertisements

(Text with EEA relevance)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty
Community,

establishing the European

Having regard to Directive 2003/71/EC of
the European
Parliament and of the Council of 4 November 2003 on the
prospectus to be published when securities are offered to the
public or
and amending Directive
2001/34/EC (1), and in particular Article 7(1) thereof,

admitted to trading

Whereas:

(1)

(2)

international

Regulation (EC) No 1606/2002 of
the European
Parliament and of the Council of 19 July 2002 on the
accounting standards (2)
application of
requires companies governed by the law of a Member
State, whose securities are admitted to trading on a
regulated market in any Member State, to prepare their
consolidated accounts in accordance with International
Accounting Standards, now commonly referred to as
International Financial Reporting Standards, adopted
pursuant to Regulation (EC) No 1606/2002 (hereinafter
referred to as adopted IFRS),
for each financial year
starting on or after 1 January 2005.

Commission Regulation (EC) No 809/2004 of 29 April
2004 implementing Directive 2003/71/EC of
the
European Parliament and of the Council as regards infor­
mation contained in prospectuses as well as the format,
incorporation by reference and publication of
such
prospectuses and dissemination of advertisements (3)
requires third country issuers to prepare the historical
financial information in prospectuses for offer of securit­
ies to the public or the admission of securities to trading
on a regulated market in accordance with adopted IFRS
or with the national accounting standards of a third
country equivalent to these standards.

(3)

to assess the equivalence of

the Generally
In order
(GAAP) of a third
Accepted Accounting Principles
country with adopted IFRS, Commission Regulation

(1) OJ L 345, 31.12.2003, p. 64.
(2) OJ L 243, 11.9.2002, p. 1.
(3) OJ L 149, 30.4.2004, p. 1.

the European Parliament and of

(EC) No 1569/2007 of 21 December 2007 establishing a
mechanism for
the determination of equivalence of
accounting standards applied by third country issuers
to Directives 2003/71/EC and
of securities pursuant
2004/109/EC of
the
Council (4) provides for the definition of equivalence
and establishes a mechanism for the determination of
equivalence of GAAP of a third country. Regulation
(EC) No 1569/2007 also requires that the Commission
decision permit Community issuers to use IFRS adopted
pursuant to Regulation (EC) No 1606/2002 in the third
country concerned.

Financial statements drawn up in accordance with IFRS
as issued by the International Accounting Standards
Board (IASB) provide users of these statements with a
sufficient level of information to enable them to make
the assets and liabilities,
an informed assessment of
financial position, profit and losses and prospects of an
issuer. Therefore, it is appropriate to allow third country
issuers to use IFRS as issued by the IASB within the
Community.

to the

In December 2007 the Commission consulted the
Committee of European Securities Regulators (CESR)
with regard
the
technical
equivalence of the Generally Accepted Accounting Prin­
ciples (GAAP) of the United States, China and Japan. In
March 2008 the Commission extended the consultation
with regard to the GAAPs of South Korea, Canada and
India.

assessment of

In its advice delivered in March, May 2008 and in
October 2008 respectively, CESR recommended finding
US GAAP and Japanese GAAP equivalent to IFRS for use
within the Community. Furthermore, CESR recom­
mended the acceptance of
financial statements using
GAAPs of China, Canada, South Korea and India
within the Community on a temporary basis, until no
longer than 31 December 2011.

In 2006 the United States'
Financial Accounting
Standards Board and the IASB concluded a Memorandum
of Understanding which reaffirmed their objective of
convergence between US GAAP and IFRS and outlined
the work programme for this purpose. As a result of this

(4)

(5)

(6)

(7)

(4) OJ L 340, 22.12.2007, p. 66.

L 340/18

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Official Journal of the European Union

19.12.2008

work programme many major differences between US
GAAP and IFRS have been resolved.
In addition,
following the dialogue between the Commission and
the US Securities and Exchange Commission, reconci­
liation for Community issuers which prepare their
financial statements in accordance with IFRS as issued
by the IASB is no longer required. Therefore, it is appro­
priate to consider US GAAP equivalent to adopted IFRS
from 1 January 2009.

by

the

convergence

In August 2007 the Accounting Standards Board of
Japan and the IASB announced their agreement
to
eliminating major
accelerate
differences between Japanese GAAP and IFRS by 2008
and the remaining differences before the end of 2011.
The Japanese authorities do not require any reconciliation
for Community issuers which prepare their
financial
statements according to IFRS. Therefore, it is appropriate
to consider Japanese GAAP equivalent to adopted IFRS
from 1 January 2009.

According to Article 4 of Regulation (EC) No 1569/2007
third country issuers may be permitted to use other third
country GAAPs which are converging or committed to
adopt IFRS or which have reached a mutual recognition
agreement with the Community before 31 December
2008 for a transitional period ending no later than
31 December 2011.

In China, the Accounting Standards for Business Enter­
prises are substantially converged with IFRS and cover
nearly all topics under current IFRS. However, since the
are
Accounting Standards
further
applied only from 2007,
evidence of their proper application.

for Business Enterprises
there is need for

The Accounting Standards Board of Canada made a
public commitment in January 2006 to adopt IFRS by
31 December 2011 and is taking effective measures to
secure timely and complete transition to IFRS by that
date.

The Korean Financial Supervisory Commission and the
Korean Accounting Institute made a public commitment
in March 2007 to adopt IFRS by 31 December 2011 and
to secure timely and
are taking effective measures
complete transition to IFRS by that date.

The Indian Government and the Indian Institute of
Chartered Accountants made a public commitment in
July 2007 to adopt IFRS by 31 December 2011 and
are taking effective measures to secure the timely and
complete transition to IFRS by that date.

(8)

(9)

(10)

(11)

(12)

(13)

(14) Whilst no final decision on the equivalence of accounting
standards converging to IFRS should be taken until an
assessment of the implementation of those accounting

it

it

is important

the efforts of

standards by companies and auditors has been carried
out,
those
to support
countries which have undertaken to converge their
those
accounting standards
to IFRS and also of
IFRS.
countries which have undertaken to adopt
Accordingly,
is appropriate to allow third country
issuers to prepare their annual and half-yearly financial
statements in accordance with the GAAPs of China,
Canada, South Korea or India in the Community for
the transitional period of no more than three years.
Consequently, Regulation (EC) No 809/2004 should be
amended accordingly to reflect the changes concerning
the use of GAAPs of the United States,
Japan, China,
Canada, South Korea and India to prepare the historical
information by third country issuers and to
financial
delete some of its outdated provisions.

(15)

(16)

The Commission should continue to monitor, with the
technical assistance of CESR, the development of those
third country GAAPs in relation to adopted IFRS.

Countries should be encouraged to adopt IFRS. The EU
may determine that the national standards which have
been determined to be equivalent may no longer be used
in preparing information required under the Directive
2004/109/EC or Regulation (EC) No 809/2004 imple­
menting Directive 2003/71/EC when those respective
countries have adopted IFRS as their sole accounting
standard.

(17)

The measures provided for in this Regulation are in
accordance with the opinion of the European Securities
Committee,

HAS ADOPTED THIS REGULATION:

Article 1

Article 35 of Regulation (EC) No 809/2004 is amended as
follows:

1. Paragraphs 5 and 5a are replaced by the following:

From 1 January 2009,

‘5.
present their historical financial
either with one of the following accounting standards:

third country issuers shall
information in accordance

(a)

International
pursuant to Regulation (EC) No 1606/2002;

Financial Reporting Standards

adopted

(b) International Financial Reporting Standards provided that
the notes to the audited financial statements that form
information contain an
part of the historical financial
these financial
explicit and unreserved statement
statements
Financial
Reporting Standards in accordance with IAS 1 Presen­
tation of Financial Statements;

that
International

comply with

19.12.2008

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Official Journal of the European Union

L 340/19

(c) Generally Accepted Accounting Principles of Japan;

Article 2

(d) Generally Accepted Accounting Principles of the United

States of America.

financial

information,

5a.
Third country issuers are not subject to a requirement,
under Annex I, item 20.1; Annex IV, item 13.1; Annex VII,
item 8.2; Annex X, item 20.1 or Annex XI, item 11.1, to
included in a
restate historical
prospectus and relevant
for the financial years prior to
financial years starting on or after 1 January 2012, or to a
requirement under Annex VII, item 8.2.bis; Annex IX, item
to provide a narrative
item 20.1.bis,
11.1; or Annex X,
International
between
differences
description
Financial Reporting Standards adopted pursuant to Regu­
lation (EC) No 1606/2002 and the accounting principles
in accordance with which such information is drawn up
to financial years
relating to the financial years prior
the
starting on or after 1 January 2012, provided that
historical
information is prepared in accordance
with the Generally Accepted Accounting Principles of the
People's Republic of China, Canada, the Republic of Korea
or the Republic of India.’;

financial

the

of

during

authorities

The Commission shall continue to monitor, with the technical
assistance of the CESR, the efforts made by third countries
towards a changeover to IFRS and pursue an active dialogue
The
the
with
Commission shall submit a report on progress made in this
regard to the European Parliament and the European Securities
Committee (ESC) during 2009. The Commission shall also
report expeditiously to Council and the European Parliament
if situations arise where EU issuers in the future are required
to reconcile their financial statements to the national GAAP of
the foreign jurisdiction concerned.

convergence

process.

Article 3

The dates announced publicly by third countries in relation to a
changeover
the
abolition of equivalence recognition for those third countries

to IFRS shall serve as reference dates for

Article 4

This Regulation shall enter into force on the third day following
its publication in the Official Journal of the European Union.

2. Paragraphs 5b to 5e are deleted.

It shall apply from 1 January 2009.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 12 December 2008.

For the Commission

Charlie McCREEVY
Member of the Commission