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Europe and US agree GAAP reconciliation roadmap

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22nd Apr 2005
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European companies seeking listings in the US could avoid the need to reconcile their figures to US generally accepted accounting principles (GAAP) as soon as 2007, following a deal between the European Commission and the US Securities and Exchange Commission.

Meeting in Washington DC this week, officials involved in the EU-US Financial Markets Regulatory Dialogue agreed a roadmap setting them on the road to equivalence for International Financial Reporting Standards (IFRS) and US GAAP.

The roadmap sets the SEC on a path to accepting IFRS filings as as soon as 2007, but no later than 2009.

EU internal markets commissioner Charlie McCreevy said the agreement was a major step towards establishing high-quality global accounting standards.

"Today's announcement is a sign of our common interest in reducing regulatory burden and related costs on business," said McCreevy. "

"I very much welcome the constructive approach the SEC is taking to moving these critical issues forward. We will work closely together to promote the closer alignment of IFRS and US GAAP and towards the elimination of US GAAP reconciliation requirements for foreign private issuers."

There was still much to do, he said, "but the bandwagon has now started".

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