International Accounting - Report of a major italian company Essay

International Accounting - Report of a major italian company - Essay Example But now that IAS 38 has been AGREED with finality to be the new compulsory accounting procedure, then we have to follow suit. According to the European Council of Finance Ministers, on December 13, 2001 â€Å" agreed to a general orientation on a proposed regulation that would require all EU listed companies, including banks and insurance companies, to prepare their consolidated financial statements using IAS. ECOFIN agreed that this requirement should go into effect in 2005 at the latest. However, companies that currently apply US GAAP as their primary financial reporting standards would not have to apply IAS until 2007. The 2007 extended deadline for companies using US GAAP was inserted at the request of the German government. EU Internal Market Commissioner Frits Bolkestein said: The International Accounting Standards Regulation will introduce a new era of transparency and put an end to the current Tower of Babel in financial reporting. It will help European firms to compete on equal terms when raising capital on world markets and allow investors and other stakeholders to compare companies performance against a common standard. However, I regret the Ministers decision to grant some big companies the right to apply US GAAP standards until 2007, two years after the Lisbon deadline for completing the Internal Market in financial services.† (http://www.iasplus.com/pastnews/2001dec.htm) Comment: The main purpose that all countries are â€Å"rushed† to apply these international accounting standards is to have a comment yardstick to compare one company in the European Union with another country selling the same products and services. If we call an item â€Å"goodwill† in England, then in the same situation in another far away place like Australia or United States, we can confidently call the same item bought as â€Å"goodwill†. Accounting is defined as â€Å"the language of business†.