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International Accounting Standards (IAS) Regulation: evaluation

The European Commission issued on 18 June 2015 its report on the evaluation of Regulation 1606/2002 (the IAS Regulation), shedding light on experience with the International Financial Reporting Standards (IFRS) in Europe in the past decade.

18.06.2015 - Report on the evaluation of the IAS Regulation

IAS Regulation: objective

Applying these international standards means standardising companies' financial reporting so that:

  • financial statements are more transparent and comparable.
  • the EU capital market and the single market can operate efficiently.

IAS Regulation: scope

  • Basic rule - the IFRS must be applied to the consolidated financial statements of EU companies whose securities are traded on a regulated EU market.
  • Discretionary application - EU countries can opt to extend the use of IFRS to annual financial statements and non-listed companies as well.
  • The Transparency Directive  also stipulates that all issuers (including non-EU ones) whose securities are listed on a regulated market located or operating in an EU country must use the IFRS.

Developments since the IFRS's adoption

Over 100 countries now use IFRS. These accounting standards have been increasingly discussed at international level (e.g. G20, Basel Committee) and with various interested parties in the EU, especially in the wake of the financial crisis.

Several initiatives concerning technical issues and governance are under way, both internationally and in the EU.

In the EU, the reform of European Financial Reporting Advisory Group (EFRAG) which advises the Commission on IFRS matters was successfully implemented on 31 October 2014 when the amended statutes and internal rules of EFRAG came into force. These changes, based on the recommendations from the report of Mr Maystadt, are designed to strengthen the EU’s contribution to achieving high accounting standards globally.

Commission evaluation

The Commission is evaluating the IAS Regulation assessed whether:

  • the Regulation achieved its objective in an efficient and effective manner;
  • the criteria that all new IFRS should meet to become EU law are appropriate and whether the process for adoption of standards works properly;
  • the governance structure of the bodies developing the standards and advising the Commission is appropriate.

The Commission conducted the evaluation based on the following sources and workstreams:

The key findings showed that IFRS was successful in creating a common accounting language for capital markets. Companies were mostly positive about their experience of using IFRS and in most cases, benefits outweighed costs. Investors also largely supported IFRS for improving the transparency and comparability of financial statements. Most stakeholders considered that the process through which IFRS become part of EU law works well. Importantly, the recent reform of the European Financial Reporting Advisory Group (EFRAG), which is the technical advisor to the Commission in this field, will strengthen the EU voice in the international standard-setting process.

The report identifies room for improvement in some areas. The collaboration between actors in the endorsement process could be enhanced to improve timeliness and to allow for a more holistic consideration of standards with other aspects of EU law. IFRS issued by the IASB need to be endorsed by the Commission. An endorsement process remains necessary to ensure that the standards developed by a private body meet certain criteria and are fit for the European economy before becoming part of EU law.

07.08 - 07.11.2014 - Public consultation on the impact of IFRS in the EU


Expert group

The Expert Group advised and assisted the Commission with the evaluation.

The Expert Group comprises representatives of organisations and Member State authorities.

This ensures that the interests of those responsible for preparing financial statements, investors, financial analysts, accountants, auditors and other users are represented. No representative of the civil society applied to be member of the group and their input was sought through other means.


03.12.2014 - 3rd meeting of the expert group
24.10.2014 - 2nd meeting of the expert group
15.07.2014 - 1st meeting of the expert group

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