Recognition of IFRS in EU
The International Financial Reporting Standards are developed by the International
Accounting Standards Board (IASB), which is a private sector organization and
as such lacks democratic legitimacy. To retain legislative competence, the EU
Commission reserves the right to review the IFRS for compliance prior to their
transformation into Community law.
To this end, the European Commission has
developed an endorsement mechanism: In particular, all newly developed or
revised standards and interpretations have to undergo an endorsement process
before they become binding law in the EU. Such standards and interpretations are
then incorporated into Community law through adoption by the European Com-
mission of a Regulation on the application of IFRS in the EU. As a consequence,
it is not necessary for the relevant provisions to be transposed into national law
in a legislative procedure by the Member States, as would be the case with a
directive. Instead, they take legal effect in each single Member State of the EU.
The relevant standards enter into force with the publication of the Regulation and
are then applicable across the EU.
EU Forecast
euf:ba18f:119/nws-01