The Institute of Chartered Accountants (ICAI) in Ireland has called on the Government to resolve the outstanding issues around the implementation of International Financial Reporting Standards (IFRS), a key issue of its EU presidency.
In September 2003 the European Commission adopted the regulation endorsing certain International Financial Reporting Standards.
The regulation requires all listed companies, including banks and insurance companies, to prepare consolidated accounts in accordance with IFRS from 1 January 2005 onwards. The regulation also allows Member States a number of options regarding unlisted companies.
ICAI maintains that the goal of a single global and widely understood set of accounting standards should not be lost because of wrangling within the European Union over two individual standards.
The Institute made its call while issuing a position paper on IFRS issues in Ireland.
ICAI deputy president, Terence O'Rourke said: 'The move to international standards will remove a considerable obstacle to the understanding of company accounts on a global basis. It will be of enormous value not just to accountants but also to investors and business leaders everywhere'.
'However that goal is being put in peril by wrangling over two particular standards issued by the International Accounting Standards Board,' he added.
ICAI has been critical of the Irish Government's failure to make a decision about the application of IFRS in Ireland.
The European Regulation requires all listed companies to use IFRS in their consolidated accounts but have left it up to national Governments to determine whether other company types can use them. In Ireland, companies are obliged to use standards set by the Accounting Standards Board in the UK.
'It is unacceptable that the Government has not yet made this decision. While it may not impact upon smaller companies that can continue to use Irish GAAP, listed companies may soon be obliged to use IFRS in preparing their consolidated accounts but Irish GAAP for their subsidiaries'.
The ICAI said that the Government has indicated that it will probably move to allow all companies to use IFRS but its failure to make a formal decision is creating 'real confusion'.
