CHANGES IN

EUROPEAN ACCOUNTING STANDARD

PRESENTERS:

SWAPNIL PACHARNE : 32
PINTU RAJAN : 39
PRAFUL SHETTIGAR : 48
 INTRODUCTION

The chief standard-setter is the Accounting Standards

Board(ASB), which issues standards called Financial
Reporting Standards (FRS).

ASB is part of the Financial Reporting Council and it

replaced the Accounting Standards Committee(ASC) in 1990.

Adoption of IAS for consolidated reporting by EU

multinationals, 1995 :
The European Commission, in consultation with the
member states, started to develop a new accounting strategy.
International Accounting Standards Board (IASB), 2001:
IASB was created with a mandate to produce a single set
of high-quality, understandable, and enforceable
International Financial Reporting Standards (IFRS).

The International Accounting Standard Board (IASB) has

been working on a model for the valuation of assets and
liabilities with the aims of harmonising financial
accounting rules and enhancing transparency and
comparability in company accounts.
 Reforms in EU Accounting Standards

Common legal framework for integrated securities and

derivatives markets, Feb 2001:
All EU-listed companies report under the same accounting
framework. Intention was to allow EU companies to use the
same set of financial statements for listing purposes
throughout the world.

SEPTEMBER 2002:
New Accounting Regulation that would require all EU-listed
companies to follow International Financial Reporting
Standards (IFRS) in their consolidated financial statements as
of 2005.
IASB issued its first completely new Standard, IFRS 1,
June 2003:
IFRS 1 provides specific guidance on first-time
application of the Standards and imposes overriding
transitional provisions that must be applied on first-time
adoption.

IASB and the FASB each published an exposure draft

containing joint proposals to further improve and align
accounting for business combinations, June 2005:
The proposed Standard would replace IFRS 3
IFRS 2 "Share-Based Payment“, February 2004:
Requires companies that prepare financial
statements under IASB Standards to recognize the
share-based payments, including employee stock-
based compensation, as an expense.
 HOW IMPORTANT IS THE CHANGE?

New system of financial reporting will have a

significant impact on companies' balance sheets and
income statements.
Adopting IFRS will significantly change national
accounting standards in many countries and the role of
standards setters.
The efforts to converge IFRS and U.S. GAAP and the
trend toward adopting IFRS create an opportunity to
develop truly global high-quality accounting standards
that will improve the consistency and quality of
financial reporting worldwide.
THANK YOU