The European parliament has surprised many by proposing a resolution that will force the European Commission (EC) to rethink its plans to ratify International Financial Reporting Standard 8 (IFRS 8).
IFRS 8 is the contentious standard pertaining to segmental reporting and the resolution will mean that the EC will have to completely change its plans to approve the standard.
Closely connected to the US standard FAS 131, IFRS 8 was first set up as part of the International Accounting Standards Board's (IASB) effort at joining with the US.
Intervention by the European parliament in the matter is widely regarded as a huge setback to the IASB.
The economic and monetary affairs committee said that the EC must "urgently carry out an in-depth impact assessment before endorsing the standard …should the commission fail to do so, parliament will carry out its own impact assessment".
Meanwhile, the US Securities and Exchange Commission (SEC) is to give permission for foreign companies listed in the US to choose between using the IFRS or the US generally accepted accounting principles (GAAP).
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