IFAC Response to European Commission Survey: Effects of Using IFRS in the EU

IFAC^® has responded to a public consultation survey from the European Commission, Effects of Using International Financial Reporting Standards (IFRS) in the European Union (EU), which addresses Regulation 1606/2002 (“the IAS Regulation) in Europe. The consultation is aimed at assessing the effects of using IFRSs in the EU.

In its response, IFAC agrees that the regulation’s objectives are still valid, and that the IAS Regulation has furthered the move toward establishing a set of globally accepted high-quality standards.

Further, the response notes that IFAC promotes regulatory consistency and convergence, where appropriate, including the global adoption and implementation of high-quality, international standards. This includes—but is not limited to—IFRS.

IFRSs are used in more than 110 jurisdictions and are included in the list of 12 sets of standards that the Financial Stability Board has designated as deserving of priority implementation. Research commissioned by the IFRS Foundation indicates that there are benefits to those jurisdictions that have adopted IFRS, in particular regarding transparency and comparability.

Therefore, globally accepted, high-quality financial reporting standards are arguably necessary for, and of benefit to, the EU—permitting the EU and organizations that use the standards to more readily access international capital markets, be competitive, and attract foreign investment. Ultimately, this enhances confidence in European financial markets.