13 January 2006

CESR reminds on clear and transparent disclosure on use of financial reporting standards

CESR reminds issuers and investors about the importance of clear and transparent disclosure on the use of any options made available by applicable financial reporting standards. This CESR statement is addressed in particular to European listed companies preparing consolidated financial statements in accordance with IFRSs as adopted by the EU. It also alerts users to a concern that because of available options and given the lack of IFRS guidance in certain specific areas, the comparability between different issuers is not necessarily assured.

The purpose of this communication is to remind European issuers about the importance of giving clear and transparent disclosure when making use of any of the options made available to them by the applicable financial reporting standards and their decisions regarding the determination of accounting policies in the absence of specific IFRS guidance.

Since 2003, the European Commission has adopted several EU Regulations endorsing international accounting standards (IAS/IFRS) as well as amendments to existing and previously endorsed standards. This legal framework of endorsed IFRSs provides issuers with various options for the preparation of their consolidated financial statement. This CESR statement is therefore especially relevant during the transition phase where the effect of the preparers’ options is likely to have the most significant impacts on the financial presentation and results of the companies.

CESR statement

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