European Union companies with US listings may be able to end the costly practice of reconciling their financial statements to US accounting standards as soon as 2007, a top EU official said this evening.
In remarks that were more optimistic than those made yesterday by US officials, European Commissioner for Internal Markets Charlie McCreevy said reconciliation "might be eliminated, possibly as soon as 2007 but no later than 2009."
The SEC had said earlier that an agreement had been reached with Mr McCreevy on a US-EU "roadmap" for ending reconciliation "as early as possible between now and 2009 at the latest."
The roadmap deal will send McCreevy back to Europe on a hopeful note after a series of meetings with top officials, including SEC Chairman William Donaldson.
It was McCreevy's first US tour since taking office in late 2004. The former Minister for Finance said he hopes to smooth US-EU tensions over financial regulation that followed adoption by the US Congress in 2002 of the strict, post-Enron Sarbanes-Oxley accounting and corporate governance reforms.
At a press conference, McCreevy - once a practicing accountant - said he was "pleased with the positive response I received from SEC Chairman Donaldson."
Their agreement concerns a long-standing point of trans-Atlantic business tension - the requirement that US-listed EU companies must translate periodic financial filings with the SEC into America's Generally Accepted Accounting Principles (GAAP) from their home standards.
Public EU corporations recently were required to adopt International Financial Reporting Standards (IFRS), which has replaced a patchwork of differing national accounting systems.
Reconciling IFRS books to GAAP every few months costs time and money and EU companies would rather not have to do it.