2008/961/EC: Commission Decision of 12 December 2008 on the use by third countries’ issuers of securities of certain third country’s national accounting standards and International Financial Reporting Standards to prepare their consolidated financial statements (notified under document number C(2008) 8218) (Text with EEA relevance)
Date: 2008-12-12
Institutions: European Commission
Subjects: consolidated account, dissemination of information, official market, securities, standardised accounting system, stock-exchange listing, third country

L 340/112

EN

Official Journal of the European Union

19.12.2008

COMMISSION DECISION

of 12 December 2008
on the use by third countries’ issuers of securities of certain third country’s national accounting
standards and International Financial Reporting Standards to prepare their consolidated financial
statements

(notified under document number C(2008) 8218)

(Text with EEA relevance)

(2008/961/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

of Canada, Japan or United States or with a GAAP of a
third country which is subject to convergence with IFRS.

Having regard to the Treaty
Community,

establishing the European

Having regard to Directive 2004/109/EC of
the European
Parliament and of the Council of 15 December 2004 on the
harmonisation of transparency requirements in relation to infor­
mation about issuers whose securities are admitted to trading
on a regulated market and amending Directive 2001/34/EC (1),
and in particular Article 23(4) thereof,

Whereas:

(1)

(2)

(3)

Regulation (EC) No 1606/2002 of
the European
Parliament and of the Council of 19 July 2002 on the
International 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
for each financial year
referred to as adopted IFRS),
starting on or after 1 January 2005.

Articles 4 and 5 of Directive 2004/109/EC provide that
where an issuer
is required to prepare consolidated
accounts, the annual and half-yearly financial statements
shall comprise such consolidated accounts drawn up in
accordance with adopted IFRS. Even though this
requirement applies to Community and third country
third country issuers may be exempted
issuers alike,
from this requirement provided the law of
the third
country in question lays down equivalent requirements.

Commission Decision 2006/891/EC (3) provided that a
third country issuer may also prepare its consolidated
accounts,
for financial years starting before 1 January
in accordance with IFRS as issued by the Inter­
2009,
national Accounting Standards Board (IASB), with GAAP

(1) OJ L 390, 31.12.2004, p. 38.
(2) OJ L 243, 11.9.2002, p. 1.
(3) OJ L 343, 8.12.2006, p. 96.

(4)

(5)

(6)

(7)

Financial statements drawn up in accordance with IFRS
as issued by the IASB provide users of these statements
with a sufficient level of information to enable them to
make an informed assessment of the assets and liabilities,
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 assess the equivalence of

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

the European Parliament and of

to the

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

assessment of

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

financial

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

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L 340/113

(8)

(9)

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
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 according to IFRS as issued by the
IASB is no longer required. Therefore, it is appropriate 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
financial
for Community issuers which prepare their
statements according to IFRS. Therefore, it is appropriate
to consider Japanese GAAP equivalent to adopted IFRS
from 1 January 2009.

(10) 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
IFRS or which have reached a
committed to adopt
mutual
recognition agreement with the Community
before 31 December 2008 for a transitional period
ending no later than 31 December 2011.

(11)

(12)

(13)

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
applied only from 2007,
further
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
are taking effective measures
to secure timely and
complete transition to IFRS by that date.

(14)

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.

it

is important

(15) 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
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
countries which have undertaken to adopt
IFRS.
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.

the efforts of

it

(16)

(17)

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
information required under Directive
in preparing
2004/109/EC or Commission Regulation (EC) No
809/2004 (1) implementing Directive 2003/71/EC when
those respective countries have adopted IFRS as their sole
accounting standard.

(18)

In the interests of clarity and transparency Decision
2006/891/EC should be replaced.

(19)

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

HAS ADOPTED THIS DECISION:

Article 1

From 1 January 2009, in addition to IFRS adopted pursuant to
Regulation (EC) No 1606/2002, with regard to annual con­
solidated financial
statements and half-yearly consolidated
financial statements, the following standards shall be considered
as equivalent to IFRS adopted pursuant to Regulation (EC) No
1606/2002:

(a)

International Financial Reporting Standards, provided that
the notes to the audited financial statements contain an
these financial
explicit and unreserved statement
statements comply with international
financial reporting
standards in accordance with IAS 1 Presentation of financial
statements;

that

(1) OJ L 149, 30.4.2004, p. 1. Corrected by OJ L 215, 16.6.2004, p. 3.

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(b) Generally Accepted Accounting Principles of Japan;

Article 1b

(c) Generally Accepted Accounting Principles of

the United

States of America.

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

Prior to financial years starting on or after 1 January 2012, a
third country issuer shall be permitted to prepare its annual
consolidated financial statements and half-yearly consolidated
the Generally
financial
the People’s Republic of
Accepted Accounting Principles of
China or Canada, the Republic of Korea or the Republic of
India.

accordance with

statements

in

Article 2

Decision 2006/891/EC shall be repealed with effect
1 January 2009.

from

Article 1a

Article 3

This Decision is addressed to the Member States.

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
with
The
the
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.

Done at Brussels, 12 December 2008.

For the Commission

Charlie McCREEVY
Member of the Commission