European Companies May Receive Special Accounting Status

NEW YORK -- United States and European securities regulators agreed Thursday to move toward allowing European companies to list their shares in the United States without having to reconcile their accounts under United States accounting standards, Reuters reported Friday.

According to a release from the Securities and Exchange Commission, "The road map establishes a goal of eliminating the requirement as early as possible between now and 2009 at the latest."

The agreement is likely to encourage more European companies to list their shares in the United States and help them raise capital from investors in the United States. The agreement follows a series of meetings this week between Charlie McCreevy, the European commissioner responsible for internal markets and services, and senior SEC officials in the United States.

Reuters said that under the deal, European companies that adopt a new International Financial Reporting Standards system of accounting would not have to reconcile their accounts to the United States standards after 2009.

The differences between accounting standards have been a major obstacle for investors to make comparative analysis of companies from different countries and has often hindered the ability of foreign corporations to raise capital in the United States.

-- NYSSCPA.org News Staff

Posted on 4/22/05

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