Accounting standards prepared
for EU accession
An article appearing Monday in the UKs Financial Times
suggested that EU accession countries could find it difficult to comply
with international accounting standards, as is required by 2005, but
auditors in Malta confirmed that Malta was not one of those.
The head of the International Accounting Standards Board, Sir David
Tweedie suggested that former Soviet bloc states and countries in the
Mediterranean would find it difficult to come in line with the required
Tweedie said: "If you head south in Europe and head east, that
is where the problems are going to start. I am thinking of the Mediterranean
areas and the former Soviet countries coming in." The only Mediterranean
countries joining the EU are Malta and Cyprus, but it is evident that
Tweedie must have been thinking of existing member states.
The Malta Financial and Business Times spoke to partners at Deloitte
and Touche, and PricewaterhouseCoopers, who said Malta has long been
in compliant with the standards. John Bonello, senior partner with PricewaterhouseCoopers
said: "In his article Sir David Tweedie, did not specify as to
which Mediterranean countries he was referring. After 1 May there will
be eight EU countries with a Mediterranean coastline. If he was asked
to name the countries I am sure he would have excluded Malta (and I
am sure others like Cyprus) because compliance with International Accounting
Standards (IAS) has been mandated on all companies in Malta by the Companies
Act since 1995.
"Membership of the European Union will mean, as Sir David Tweedie
said in his article, that by 2005 International Financial Reporting
Standards (IFRS - the successors to IAS) will become obligatory on all
companies that have to file or publish financial statements. Malta is
ahead of the pack in this regard and I therefore see no reason why membership
will present a problem our accounting rules are already those
that will apply in the EU next year."
Stephen Paris from Deloitte and Touche echoed Bonellos words and
said: "I do not think that this is an issue for Maltese companies
as we have been bound to prepare accounts in accordance with International
Financial Reporting Standards since the Companies Act was introduced
"In fact Malta was one of the first countries to adopt the then
IAS as the national standard."
In the article it is also stated that Tweedie wants companies to make
greater use of fair or market values when reporting assets and liabilities,
hitting on a subject that is the subject of much discussion and disagreement.