COMPANIES RELOCATING their headquarters to Ireland will be able to continue to use US accounting standards for an interim period under legislation enacted yesterday.

The Companies (Miscellaneous Provisions) Act 2009 allows businesses that have their parent companies incorporated in Ireland to use US generally accepted accounting principles (US GAAP) in the preparation of their accounts for a temporary period.

Previously, they would have been obliged to switch immediately to current Irish or European standards.

Minister of State for Trade and Commerce Billy Kelleher welcomed the move, which he said would attract inward investment and create jobs.

“The rapidity with which Ireland has amended its laws to provide a legislative basis for these measures sends a strong signal nationally and internationally of our commitment to working with industry in support of valuable new business opportunities,” he said.

The decision to bring forward such legislation came as a result of representations by IDA Ireland and other bodies, which indicated that companies faced “huge financial burdens” in transferring to Irish or international financial reporting standards.

Companies that have moved or are in the process of moving their parent companies to Ireland but that have a continuing obligation to US GAAP accounts because they remain listed in the United States are covered by the Act.

Companies can avail of the standards for a maximum of four years and the proposal will terminate in 2015.

The Act will also allow certain types of collective investment funds to migrate their activities into and out of Ireland without firstly having to wind up in their current jurisdictions.

The Act will provide, by order of the Minister, recognition of stock exchanges outside the State in which the purchase of a company’s own shares can be made.

These newly enacted “overseas market purchases” will allow Irish companies registered on international stock exchanges to buy back their own shares, with an obligation on companies to publicise these purchase in order to inform the market.