Insight: Can I use my local GAAP? Recent developments in equivalence of non-EU accounting standards
Ruth Walters, Carmen Reynolds, Francis Fitzherbert-Brockholes, Philip Broke, Stuart Matty

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On 21 December 2007, the Commission adopted Regulation (EC) No 1569/2007 (the "2007 Regulation"). This is of interest to issuers that are subject to the requirements of the Prospectus Directive or the Transparency Directive and use accounting standards of non-EEA countries ("third countries").

This article covers:

• The European Commission has adopted a Regulation setting out the basis and procedure for assessing the equivalence of third country GAAPs with IFRS.
• By 30 June 2008, the Commission will propose measures specifying those GAAPs of non-EU countries that are to be considered as equivalent to IFRS, with effect from 1 January 2009.
• CESR has issued a consultation paper proposing that US GAAP should be considered as equivalent. It also makes recommendations in relation to Japanese and Chinese GAAPs, and CESR will consult shortly on the equivalence of Canadian, South Korean and Russian GAAPs.
• The Regulation also gives the Commission the power to allow non-EU issuers to use non-equivalent GAAPs in the EU for a transitional period ending in 2011.