Mutual Recognition of IFRS, U.S. GAAP a Priority Under New EU-US Transatlantic Framework
April 30, 2007
At the annual European Union (EU) - U.S. Summit held on April 30, 2007 in Washington D.C., the EU and U.S. announced the adoption of a Framework for Advancing Transatlantic Economic Integration.
The EU-US joint statement, signed on April 30 by Angela Merkel, chancellor of Germany and currently president of the European Council, Jose Manuel Barroso, president of the European Commission (EC) and U.S. President George W. Bush, is available here, and the Framework is available here.
One of the key points in the Framework is the formation of a Transatlantic Economic Council. Additionally, the Framework lists various “Lighthouse Priority Projects” or priorities on which progress updates will be closely followed, which includes “Promote and seek to ensure conditions for U.S. Generally Accepted Accounting Principles (U.S. GAAP) and International Financial Reporting Standards (IFRS) to be recognized in both jurisdictions [the EU and U.S.] without the need for reconciliation by 2009 or possibly sooner.
The full list of “Lighthouse Priority Projects” included in the Framework is:
- Intellectual Property Rights. Develop procedures for the exchange of information relating to goods suspected of infringing intellectual property rights, the exchange of customs officials and the organization of joint technical assistance and/or enforcement missions and seek progress in the harmonisation of the different patent regimes.
- Secure trade. Develop common and accepted standards to maximize security, safety and facilitation of international trade supply chain that could lead to mutual recognition of programs for economic operators. Begin to exchange information on validation results associated with the Customs Trade Partnership Against Terrorism and Authorized Economic Operator programs in order to avoid the duplication of controls and to reduce business costs by avoiding divergent control requirements, as appropriate.
- Financial Markets. Promote and seek to ensure conditions for the U.S. Generally Accepted Accounting Principles and International Financial Reporting Standards to be recognized in both jurisdictions without the need for reconciliation by 2009 or possibly sooner.
- Innovation and Technology.
- Conduct a high-level conference on innovation in health-related industries and a workshop on best practices in innovation policies;
- Develop a joint framework for cooperation on identification and development of best practices for Radio Frequency Identification (RFID) technologies and develop a work plan to promote the interoperability of electronic health record systems;
- Develop a science-based work plan for EU-U.S. collaboration on innovative and eco-efficient biobased products;
- Establish a joint research infrastructure for mouse functional genomics (following a joint meeting in 2007 in Belgium);
- Sponsor joint workshops or conferences to foster the exchange of information on nanotechnology in areas of mutual interest.
- Investment. Establish a regular dialogue to address obstacles to investment.
Prepared April 30, 2007 by Edith Orenstein eorenstein@FinancialExecutives.org Director, Technical Policy Analysis, Financial Executives International (FEI). This summary does not represent FEI opinion unless specifically noted above.