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International accounting standards (IAS)

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International accounting standards (IAS)

The European Union (EU) is harmonising the financial statements of listed companies in order to guarantee the protection of investors. By applying international accounting rules, it sets out to maintain confidence in the financial markets while facilitating cross-border and international securities trading.


Regulation (EC) No 1606/2002/EC of the European Parliament and of the Council of 19 July 2002 on the application of international accounting standards [See amending act(s)].


The objective of this Regulation is the adoption and application of international accounting standards in the European Union (EU) in order to harmonise the financial information presented by companies. The aim is to ensure a higher level of transparency and comparability of financial statements.


The International Financial Reporting Standards (or the former International Accounting Standards - IAS) are adopted by the London-based International Accounting Standards Board (IASB).


Since 2005 all listed EU companies (including banks and insurance companies) must prepare their consolidated financial statements in accordance with the IFRS. Member States may also permit or require EU-listed companies to use this standard for their annual accounts and non EU-listed companies for their annual and/or consolidated accounts.

Endorsement mechanism

For effective implementation, the adoption of an International Accounting Standard should provide an accurate and honest image of the company's financial situation and performance, correspond to European public interests and meet the criteria of understandability, relevance, reliability and comparability required of the financial information needed for making economic decisions and assessing the stewardship of management. The Commission is consulting with the European Securities and Markets Authority (ESMA) to develop a common approach towards enforcing these rules.

The system is to be subject to an endorsement mechanism with a two-tier structure:

  • a regulatory level, with an Accounting Regulatory Committee made up of representatives from the Member States and chaired by the Commission. On the basis of the Commission's proposals, this Committee decides whether the IRFS are to be adopted. Its aim is to ensure full transparency and accountability vis-à-vis the Council and Parliament;
  • a technical level, with an Accounting Technical Committee, the European Financial Reporting Advisors Group (EFRAG), made up of accounting experts from the private sectors of several Member States. This Committee provides the support and expertise needed to assess the IFRS and to advise the Commission on whether or not to adopt the IFRS being considered.

Application based on a consolidated text adopted by the Commission

The international accounting standards and related interpretations are included in an implementing regulation of the Commission containing the applicable standards in force since 14 September 2002. The objective is to simplify the application of these standards by grouping them together into a single consolidated text adopted by the Commission, Regulation (EC) No 1126/2008 of 3 November 2008.

This Regulation has itself been amended several times to include all of the standards presented by the International Accounting Standards Board (IASB) since 2008, including certain amendments from 2012 on consolidated financial statements, partnerships and information to be provided on interests held in other entities.



Entry into force

Deadline for transposition in the Member States

Official Journal

Regulation (EC) No 1606/2002



OJ L 243 of 11.9.2002

Amending act(s)

Entry into force

Deadline for transposition in the Member States

Official Journal

Regulation (EC) No 297/2008



OJ L 97 of 9.4.2008

The successive amendments and corrections to Regulation (EC) No 1606/2002 have been incorporated in the original text. This consolidated version is of documentary value only.



Commission Regulation (EC) No 1126/2008 of 3 November 2008 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council (Text with EEA relevance) [Official Journal L 320 of 29.11.2008].


Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC [Official Journal L 182 of 29.06.2013].

The Directive aims to revise the accounting rules applicable to undertakings in the EU with a view to: i) enhancing the clarity and comparability of financial statements; ii) lightening the administrative burden and simplifying the accounting rules, notably for SMEs and iii) improving transparency of the sums paid to governments by the extractive industry and loggers of primary forests.

Last updated: 10.01.2014