International Accounting Standards Get New Respect
No longer the impossible dream, international accounting standards (IAS) just took another step closer to gaining widespread acceptance. On March 12, 2002, the European Parliament voted in favor of plans to require IAS for listed companies in the European Union (EU), starting in the year 2005.
The decision of whether or not to require non-traded companies to use IAS will be left to the member states. Temporary exemptions are available until the year 2007 for companies that are publicly traded in multiple jurisdictions (i.e., in the EU and on a regulated third country market) and are already applying another set of internationally accepted standards, such as U.S. generally accepted accounting principles (GAAP).
Separately, the International Accounting Standards Committee Foundation has posted on its web site an extract of its annual report that lists the names of its underwriters and supporters. Altogether, the list of supporters contains 188 corporations, associations, and other institutions. The Big Five accounting firms have pledged approximately a third of the organization's estimated budget. The remaining funding comes mainly from large multi-national corporations, along with central banks and trade associations. Five donors declined to be named, and the board of trustees was told these decisions may have been a result of the controversy over solicitations to Enron.
In response to questions from former IASC Secretary-General David Cairns and others about the standard-setting organization's refusal to reveal its backers, Paul Volcker, chairman of the trustees of IASB's foundation has clarified that it was always the foundation's intention to publish this information. The trustees had advised the donors of this fact, when they solicited support from corporations and other bodies. However, the information was part of the foundation's annual report, and they were not at liberty to release it prior to review and approval at a meeting of the trustees.
The full annual report, with audited financial statements, will be available on the web site of the International Accounting Standards Board during the week of March 18, 2002.