TABLE OF CONTENTS The basic rule is:
All listed companies in the EU have to prepare their consolidated financial statements in accordance with International Financial Reporting Standards for financial years starting on or after 1 January 2005
Let us analyse the practicalities in more detail.
Exact timing Although early adoption was permitted for those companies following the EU regulation the earliest to make the transition will have been those with a 31 December 2005 year end as this will have been the first full financial year completed after the mandatory date. Companies with different year ends will have transferred at their respective year ends in 2006 (Figure 2.1).
Figure 2.1: Transition date to IFRS for a UK company with a 30 June year end
Listed companies The rules apply to any company that has shares or debt traded on a regulated market in any of the EU regulated states. Consequently this covers not only the London Stock Exchange but organizations such as LIFFE (The London International Financial Futures and Options Exchange).
Although this appears to give very broad coverage it does not include AIM as this ceased to be a regulated market prior to 1 January 2005. This does not mean that companies listed in this market escape the net, but in recognition of their smaller size they have been given a 2-year extension, and do not need to comply until after 1 January 2007. This dispensation helps ensure that...
