EU pushes US to drop accounting rules

The European Union yesterday stepped up its campaign to persuade the US to drop its requirement that foreign companies listed in New York must file accounts under accounting principles in addition to international standards.

Charlie McCreevy, the EU internal market commissioner, said it was time to "release companies from the costly burden of converting standards".

US authorities last year signalled their willingness to lift this requirement from EU companies, but Mr McCreevy's officials complain there is no clear timetable for such a move. European companies listed in the US must report according to US generally accepted accounting principles (US GAAP) in addition to the international financial reporting standards used in Europe. American companies listed in the EU, however, may continue to report only according to US GAAP.

Mr McCreevy suggested a US refusal to move towards accepting international standards could affect the EU's decision on accepting US accounting standards.

"Under our new Prospectus and Transparency Directives, we must come to a decision about the equivalence of US GAAP to allow them to continue to publish their accounts in US GAAP," he said. The commissioner said that decision would be based on a report by EU regulators this summer, but he added: "This is not a one-way street - it is only reasonable for European companies to expect that US regulators will make similar efforts to judge the equivalence of our international standards with US GAAP and, once this is done, to release companies from the costly burden of converting standards."

Mr McCreevy said he would raise the issue with the US Securities and Exchange Commission on his visit to Washington this month. "I think it is about time that we come to an agreement on a framework and a timetable. This would be good for business on both sides of the Atlantic," Mr McCreevy said. - (Financial Times Service)