CESR submits its advice to the European Commission on the equivalence of Chinese, Japanese and US GAAPs

31 Mar. 2008 - CESR today publishes its advice to the Commission on the equivalence of Chinese, Japanese and US GAAPs.

CESR’s recommendations in the technical advice are the following:

- CESR recommends the Commission find US GAAP equivalent to IFRS for use on EU markets.

- CESR recommends the Commission consider Japanese GAAP equivalent, unless there is no adequate evidence of the Accounting Standards Board of Japan (ASBJ) achieving to timetable the objectives set out in the Tokyo Agreement.

- CESR recommends the Commission postpone a final decision on Chinese GAAP until there is more information on the application of the new Chinese accounting standards by Chinese issuers. CESR points out that the first complete reporting period under the new Chinese standards will only be for 2007 accounting periods. Consequently there is as yet no evidence available concerning the concrete implementation of the standards by companies and auditors. CESR believes that evidence of adequate implementation is important in the context of an outcome-based definition of equivalence. However, if the Commission were minded to allow Chinese issuers to use Chinese GAAP when accessing EU markets, CESR would recommend the Commission consider accepting Chinese GAAP according to article 4 of the Commission Regulation on the mechanism, until such time as there is adequate evidence to enable a decision to be made under article 2 thereof.

This Advice is accompanied by a press release.