The Committee of European Securities Regulators has published its recommendation for regulators on how listed companies can manage the communication of the financial impact of transitioning to international accounting standards in 2005.
CESR says it considers it essential the transition is carefully monitored by regulators, ensuring every company continues to meet its reporting requirements and investors are able to understand the effect of the new reporting standards on the financial position of listed companies.
European companies whose securities are traded on a regulated market will be required to use International Financial Reporting Standards (IAS/IFRS) to prepare their 2005 consolidated financial statements. CESR final advice to its members (Europe's securities regulators) following consultation during October and November 2003, attempts to blend the needs of listed companies and investors by proposing that listed companies implement a phased transition process.
This will facilitate listed companies in their assessment of the financial consequences and enable appropriate planning for the application of the international accounting
standards whilst also ensuring investors are provided with financial information which is easy to interpret.