Financial data The Prospectus Directive and Regulation have also harmonised the requirements regarding financial statements and audit procedures. The EU harmonisation procedure in this respect began in 1995 and resulted in the adoption in 2002 of IAS/IFRS. IAS/IFRS provides a comprehensive set of standards for financial reporting. Moreover, in comparison to US Generally Accepted Accounting Principles (“GAAP”), IAS/IFRS are less voluminous and based on principles rather than on very detailed rules and interpretations. Since January 2005, IAS/IFRS are mandatory for all publicly traded companies preparing consolidated accounts. This harmonisation allows a common approach for listed companies in the EU and as a result allows a comparison of the financial statements of these companies. European and US financial information requirements in prospectuses are now substantially similar. A prospectus in Europe would in particular require: • 3 years of audited consolidated financial statements; • Consolidated interim financial statements if the last audited annual accounts are more than 9 months old; • Pro forma financial information when the issuer has made a significant business acquisition. In the US, similar financial statement periods and pro forma data are required, although for US companies, interim data on a quarterly basis is necessary. Also: • 5 years of selected historical financial data is required; • Critical accounting policies must be disclosed; • Extensive quantitative and qualitative disclosures about market risk are necessary.
Posted on: Tue, 25 Mar 2014 12:28:31 +0000
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