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Gains of IFRS in Europe must be protected: Prada

The gains of IFRS in the European Union (EU) and Europe's commitment to the standard as a global reference have to remain intact and undiluted, IFRS Foundation Trustees chairman Michael Prada said yesterday at a Frankfurt meeting of the organisation.

Prada said although Europe should consider whether improvements to its own processes and endorsements systems can be made, Europe should protect the "hard-fought gains" that the EU's investment in IFRS's work has brought about.

In that sense Prada said the IFRS Foundation's trustees have been keen on contributing to the work of Philippe Maystadt, the special advisor to EU Commissioner Michel Barnier, who recently released a draft report with recommendations on how to enhance the EU's role in promoting high quality accounting standards.

However Prada added: "It might seem minor to tweak the standards for use in Europe, to better reflect European preferences, or to revise the endorsement criteria so that non-endorsement of a standard or interpretation becomes more likely.

"I understand that Maystadt has cautioned against this in his draft report. Nonetheless, it would be easy to in advertently cross the Rubicon. A tweak here, a failure to endorse there and very quickly you can have standards that are once again incompatible with other parts of the world."

Otherwise, Prada said, a decade of progress unwound and he made use of the saying "Nostalgia isn't what it used to be" to highlight that the good-old days of European accounting, as he called it, were not as good as some think.

"Most of us are old enough to remember life in Europe before IFRS. I certainly am! Before, IFRS, Europe had more accounting languages than member states," Preada stressed.

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