Accounting standards

The European and global regulation of accounting standards have witnessed remarkable changes over the past twenty years. In the early 1990s, EU accounting practices were fragmented along national lines and US accounting standards were the de facto global standards. Since 2005, all EU listed companies must issue accounts according to International Financial Reporting Standards (IFRSs), as issued by the International Accounting Standards Board. US GAAP lost ground as the EU and many other countries started using IFRSs. This chapter analyses how the global regulatory context has influenced the EU’s accounting policy and how EU regulatory initiatives have affected global accounting regulation. The EU adopted IFRSs as an easy way to harmonize accounting standards while countering the hegemony of US standards. The EU’s adoption triggered a remarkable shift in global accounting regulation, ushering in a new bi-polar situation in which US GAAP and IFRSs occupy more or less equal positions.