International Accounting Standards (IAS) Regulation

International Accounting Standards (IAS) Regulation (1606/2002) dated 19 July, 2002 as implemented, in Ireland's case, by SI No. 116 of 2005 requires listed companies, including banks and insurance companies, to prepare their consolidated accounts in accordance with International Accounting Standards (IAS) from 2005 onwards.

The adoption of the Regulation is central to the achievement of single EU capital market under the Financial Services Action Plan (FSAP) by 2005. Member States have the option of extending the requirements of this Regulation to unlisted companies and to the production of individual accounts. Ireland, through SI No. 116 is extending these options to Companies on a non-mandatory basis. Although the Commission put forward the IAS proposal long before the Enron affair, this is one of a series of measures which will help to protect the EU from such problems- others include the Commission's Recommendation on Auditor Independence and its proposal to amend the Accounting Directives.

To ensure appropriate political oversight, the Regulation establishes a new EU mechanism to assess IAS adopted by the International Accounting Standards Board (IASB), the international accounting standard-setting organisation based in London, to give them legal endorsement for use within the EU. The Accounting Regulatory Committee chaired by the Commission and composed of representatives of the Member States, decides whether to endorse IAS on the basis of Commission proposals.

In its task, the Commission will be helped by EFRAG, the European Financial Reporting Advisory Group; a group composed of accounting experts from the private sector in several Member States.