44 Amendments of Sven GIEGOLD related to 2016/2006(INI)
Amendment 1 #
Motion for a resolution
Citation 1 a (new)
Citation 1 a (new)
- having regard to the Report of the High- Level Group on Financial Supervision in the EU, chaired by Jacques de Larosière, of 25 February 2009
Amendment 2 #
Motion for a resolution
Citation 2 a (new)
Citation 2 a (new)
- having regard to Directive 2012/30/EU of the European Parliament and of the Council of 25 October 2012 on coordination of safeguards which, for the protection of the interests of members and others, are required by Member States of companies within the meaning of the second paragraph of Article 54 of the Treaty on the Functioning of the European Union, in respect of the formation of public limited liability companies and the maintenance and alteration of their capital, with a view to making such safeguards equivalent,
Amendment 3 #
Motion for a resolution
Citation 11 a (new)
Citation 11 a (new)
- having regard to IASB's Discussion Paper DP/2013/1 of July 2013 on A Review of the Conceptual Framework for Financial Reporting and to IASB's Request for Views of July 2015 on the Trustees' Review of Structure and Effectiveness,
Amendment 4 #
Motion for a resolution
Citation 11 b (new)
Citation 11 b (new)
- having regard to the Comment of the European Commission of 1 December 2015 on IASB's Trustees' Review of Structure and Effectiveness,
Amendment 5 #
Motion for a resolution
Citation 11 c (new)
Citation 11 c (new)
- having regard to International Financial Reporting Standard (IFRS) 9 on Financial Instruments as issued on 24 July 2014 by the IASB, to the EFRAG endorsement advice on IFRS 9, to EFRAG's assessment on IFRS 9 against the true and fair principle, to the meeting documents of the Accounting Regulatory Committee (ARC) on IFRS 9 and to the comment letters of ECB and EBA on the endorsement of IFRS 9;
Amendment 7 #
Motion for a resolution
Citation 14 a (new)
Citation 14 a (new)
- having regard to the ESMA table on compliance with the ESMA guidelines on enforcement of financial information of 19 January 2016 (ESMA/2015/203 REV),
Amendment 10 #
Motion for a resolution
Recital A
Recital A
A. whereas the International Financial Reporting Standards (IFRS) and the international standards on auditing (ISA) are essential instruments for the efficient functioning of the internal market and of the capital markets; whereas the IFRS and ISA are a public good and therefore should enhance financial stability and serve the common good and not only the interest of investors, lenders and creditors;
Amendment 15 #
Motion for a resolution
Recital B
Recital B
B. whereas the IFRS are said to strengthen accountability by reducing the information gap between investors and companies, protecting investment and bringing transparency through enhancing the international comparability and quality of financial information and enabling investors and other market participants to make informed economic decisions, and therefore influence the behaviour of actors in financial markets and impact the stability of these markets;
Amendment 18 #
Motion for a resolution
Recital C
Recital C
C. whereas the International Accounting Standard Board (IASB) functions under the umbrella of the IFRS Foundation – a private not-for-profit corporation registered in London/UK and Delaware/US – and is the standard setter whose processes should be transparent, independent, democratic and subject to public accountability; whereas the European Union contributes around 14% to the budget of the IFRS Foundation and therefore is the largest financial contributor;
Amendment 19 #
Motion for a resolution
Recital D
Recital D
D. whereas the free global movement of capital requires a global system of accounting standards; whereas the IFRS are applied in 116 jurisdictions, but not in the US for domestic issuers;
Amendment 23 #
Motion for a resolution
Recital E
Recital E
E. whereas in the EU endorsement process the compliance of the IFRS with the criteria of the IAS Regulation is assessed, particularly through the requirement that financial statements must give a ‘'true and fair’' view of a company’'s assets and liabilities, financial position and profit or loss; whereas the IFRS should be conducive to the public good in Europe and should meet basic criteria related to the quality of information required for financial statements; whereas the IFRS have to be compliant with the Accounting Directive and the Capital Maintenance Directive to avoid that dividends and bonuses are paid out of unrealized profits which ultimately means out of capital;
Amendment 26 #
Motion for a resolution
Recital G
Recital G
G. whereas, within the EU, different stakeholders – particularly long-term investors –– have raised the issue of the consistency of the IFRS with the principles of prudence and stewardship; whereas the involvement of the European Parliament in the standard setting process is not sufficient and is not commensurate with the EU budget financial contribution to the IFRS Foundation; whereas emphasis has also been put on strengthening Europe’'s voice in order to ensure coherence in the standard-setting process;
Amendment 27 #
Motion for a resolution
Recital H
Recital H
H. whereas the recent financial crises brought the role played by IFRS in financial stability and growth onto the G20 and EU agendas, in particular the rules regarding the recognition of losses incurred in the banking system; was – as acknowledged by the G20 and the De Larosière report and the EU – inter alia caused or aggravated by inappropriate accounting rules; whereas the mark-to- market principle and in particular the rules regarding the recognition of losses incurred in the banking system had pro-cyclical effects on the economy and together with off-balance sheet accounting, excessive bonus and dividend policies contributed to financial instability; whereas the G20 called – with respect to accounting – to: -reduce the complexity of accounting standards for financial instruments, strengthen accounting recognition of loan-loss provisions by incorporating a broader range of credit information, -improve accounting standards for provisioning, as well as for off-balance sheet exposures and valuating uncertainty, -achieve clarity and consistency in the application of valuation standards internationally, working with supervisors, make significant progress towards a single set of high quality global accounting standards, -improve the involvement of stakeholders, including prudential regulators and emerging markets, through the IASB's constitutional review within the framework of the independent accounting standard setting process;
Amendment 28 #
Motion for a resolution
Recital H a (new)
Recital H a (new)
Ha. whereas the De Larosière report highlighted key shortcomings with respects to accounting standards ahead of the crisis including inter alia: - the procyclicality created by the market- to-market principle and of profit and loss recognition, - the overall trend to underestimate risk accumulation on the basis of contained volatility during cyclical upturns, - the lack of a common and transparent methodology for the valuation of illiquid and impaired assets;
Amendment 31 #
Motion for a resolution
Recital I
Recital I
I. whereas the IASB delivered the IFRS 9 financial instruments as a key response to the crisis; whereas EFRAG’'s advice on IFRS 9 was positive; whereas ECB's and EBA's comment letters on IFRS 9 were positive but also mentioned specific shortcomings;
Amendment 33 #
Motion for a resolution
Recital I a (new)
Recital I a (new)
Ia. whereas the off-balance sheet accounting issue was addressed in the following amendments to IFRS 7 Financial Instruments: disclosure and the issuance of three new standards, IFRS 10 Consolidated financial statements, IFRS 11 Joint arrangements and IFRS 12 Disclosure of interests in other entities;
Amendment 38 #
Motion for a resolution
Paragraph 1
Paragraph 1
1. Welcomes the Commission’'s IAS evaluation report on the application of the IFRS in the EU and its assessment that the objectives of the IAS Regulation have been met; deplores that the Commission has not yet proposed the required legal changes to solve the shortcomings identified in its evaluation; calls on the standard setter to ensure that the IFRS are coherent within the existing body of accounting standards; calls for a more coordinated approach in developing new standards, including coordinated timelines for application;, in particular with regard to the implementation of IFRS 9 (Financial Instruments) and the new IFRS 4 (Insurance Contracts); urges the Commission to put forward diligently legal proposals with that respect; calls on the Commission to examine in detail whether the recommendations of the Larosière Report were fully implemented, in particular recommendation number 4 calling for a reflection on whether the mark-to-market principle is needed; (Amendment inspired by GDV)
Amendment 41 #
Motion for a resolution
Paragraph 2
Paragraph 2
2. Calls on the Commission to put forward proposals on how the Maystadt recommendation regarding expanding the ‘'public good’' criterion – i.e. that accounting standards should neither jeopardise financial stability in the EU nor hinder the EU’'s economic development – will be taken into account during the endorsement process; urges the Commission, together with EFRAG, to issue clear guidelines onand appropriate legally binding standards specifying the meaning of the ‘'public good’' and the ‘'true and fair view’' in order to arrive at a common understanding of these endorsement criteria; calls on the Commission to put forward a proposal to implement - as envisaged in the Maystadt report - Maystadt's definition of the 'public good' criterion into the IAS Regulation; calls on the Commission, together with EFRAG, to examine systematically whether the 'public good' criterion as defined by Maystadt requires changes to existing accounting standards and make modifications where needed;
Amendment 47 #
Motion for a resolution
Paragraph 3
Paragraph 3
3. Welcomes the intention of the IASB to reintroduce the principle of ‘'prudence’' and re-inforce ‘'stewardship’' in the new Conceptual Framework; calls on the Commission and EFRAG to cooperate with the IASB and national and third-country standard setters to obtain wider support for these principles;deplores that IASB's interpretation of 'prudence' only means 'prudent treatment of discretion'; believes that the principle of 'prudence' should be accompanied by the principle of reliability; calls on the Commission and EFRAG to cooperate with the IASB and national and third-country standard setters to obtain wider support for these principles; calls on the IASB to examine systematically whether a revised Conceptual Framework requires changes to existing accounting standards and make modifications where needed; (Amendment inspired by DRGV and GV Bayern)
Amendment 48 #
Motion for a resolution
Paragraph 3 a (new)
Paragraph 3 a (new)
3a. Takes note of the reform regarding the recognition of losses in the IFRS framework which should allow for a more prudent build-up of loss provisions on the basis of the forward looking concept of loss expectation instead of incurred losses; is of the opinion that the EU endorsement process needs to carefully and prudently frame the way the expected loss concept is to be specified so as to avoid model overreliance and make possible clear supervisory guidance an asset impairment;
Amendment 50 #
Motion for a resolution
Paragraph 3 b (new)
Paragraph 3 b (new)
3b. Is of the opinion that the off-balance sheet accounting issue has not yet been properly and effectively addressed as the decision on whether an asset has to be reported on balance sheets or not is still subject to a mechanistic rule which can be circumvented; calls on the IASB to correct these shortcomings;
Amendment 53 #
Motion for a resolution
Paragraph 4
Paragraph 4
4. Notes that the effects of an accounting standard must be fully understood; insists that it should be a priority for the IASB and EFRAG to strengthen their impact analyses and to assess the specific needs of investors and companies; calls on the Commission to evaluate the situation and provide the resources needed in order to strengthen the capacity of EFRAG to conduct proper impact assessment as well as the general public; calls on EFRAG to strengthen its capacity to assess the impact of new accounting standards on financial stability with an explicit focus on European needs that should be introduced into the IASB's standardisation earlier on in the process; takes note that the European Supervisory Agencies (ESAs) ESMA, EBA and EIOPA having the expertise and capacity to assist in this task rejected full membership of the EFRAG board because of EFRAG being a private body not representing the public interest; calls on the Commission to explore in the framework of the revision of the IAS regulation ways to be provided with a systematic formal feedback from the ESAs;
Amendment 58 #
Motion for a resolution
Paragraph 5
Paragraph 5
5. Is concerned about thevinced that only simple rules can be effectively applied by users and controlled by supervisors; recalls that in its Statement of 2 April 2009 the G20 called for reducing the complexity of accounting standards for financial instruments and for achieving clarity and consistency in the application of valuation standards internationally, working with supervisors; is concerned about the persisting complexity of the IFRS; calls for this complexity to be reduced whenever appropriate and possible when developing new accounting standards;
Amendment 64 #
Motion for a resolution
Paragraph 6
Paragraph 6
6. Asks the Commission and EFRAG to involve the European Parliament and Council at an early stage when developing financial reporting standards in general and in the endorsement process in particular; takes the view that such scrutiny process should be formalized and structured by analogy to the scrutiny process regarding 'level 2' measures in the field of financial services; recommends to the European authorities to invite civil society stakeholders to support their activities including at the EFRAG level; calls on the Commission to create a space for stakeholders to discuss fundamental principles of accounting in Europe; calls on the Commission to grant the European Parliament the possibility to receive a short list of EFRAG Chair candidates so as to organise informal hearings ahead of a vote on the retained candidate;
Amendment 65 #
Motion for a resolution
Paragraph 7
Paragraph 7
7. BelievesIs convinced that a globalized economy needs internationally accepted accounting standards; recalls, however, that convergence is not an objective in itself but only desirable if it results in better accounting standards reflecting an orientation on the public good, prudence and reliability; believes, therefore, that a healthy dialogue should continue between the IASB and the USnational accounting standards setters, despite the slow progress of the convergence process; (Amendment inspired by DRGV and GV Bayern)
Amendment 67 #
Motion for a resolution
Paragraph 8
Paragraph 8
8. WelcomesNotes that the majority of enterprises consists of SMEs; takes note of the intention of the Commission to explore with the IASB the possibility of developing common high quality and simplified accounting standards for SMEs which could be used at EU level by SMEs listed on Multilateral Trading Facilities (MTFs), and more specifically SME growth markets; believes that as a condition to continue work in this field, IFRS have to be less complex, must not promote pro- cyclicality and the IFRS Foundation has to follow the principles of any democratic organisation; is of the opinion that the majority of the IASB members should have an SME background to ensure that the accounting standards are set in the interest of SMEs; is convinced that , trade unions, consumer protection associations and finance ministries should be represented in the IASB; calls on the Commission to undertake a proper impact assessment on the effects of IFRS for SMEs before taking any further steps; stresses that if companies do not prepare consolidated accounts or are not publicly traded, they should retain the right to draw up their financial statements in accordance with national accounting rules; (Amendment inspired by Deutsche Kreditwirtschaft)
Amendment 73 #
Motion for a resolution
Paragraph 9
Paragraph 9
9. Welcomes the fact that the Commission is encouraging Member States to follow the ESMA enforcement guidelines on IFRS; deplores that Bulgaria, Germany, Ireland, Austria, Slovenia and Sweden do not comply and do not intend to comply with the ESMA enforcement guidelines on IFRS; calls on these Member States to work towards compliance; calls on the Commission to assess whether ESMA’'s powers make it possible to ensure consistent and coherent enforcement across the EU and if not to explore other ways to ensure proper application and enforcement;
Amendment 76 #
Motion for a resolution
Paragraph 11
Paragraph 11
11. Welcomes the Commission’'s intention to examine the case for strengthening the EU rules relating to dividend distribution; notes that the Commission's evaluation of the IAS regulation has shown some evidence that differences in enforcement of IFRS persist between Member States; underlines that capital maintenance and dividend distribution rules have been cited as a source of legal challenge which can arise in certain jurisdictions where Member States permit or require the use of IFRS for individual annual financial statements on which distributable profits are based; points out that each Member State considers how to address such issues in their national legislation within the framework of the EU capital maintenance requirements; fears that this situation might result in dividends paid out of capital; calls in that respect on the Commission to ensure compliance with the EU capital maintenance directive and the EU accounting directive;
Amendment 77 #
Motion for a resolution
Paragraph 11 a (new)
Paragraph 11 a (new)
11a. Calls on EFRAG and the Commission to examine as soon as possible whether accounting standards allow tax fraud and tax avoidance and to make all necessary changes to correct and prevent potential abuse;
Amendment 79 #
Motion for a resolution
Paragraph 12
Paragraph 12
12. Supports the Commission recommendations that the Monitoring Board of the IFRS Foundation should shift the focus of its attention from the issue of internal organisation to discussing matters of public interest that could be referred to the IFRS Foundation; points out that IASB's legitimacy is at stake if the monitoring board continues to disagree over its responsibility while depending on consensus decisions; supports, in particular, the Commission's proposal to consider the reporting needs of investors with different investment time horizons and to provide specific solutions, in particular to long-term investors, when developing their standards;
Amendment 81 #
Motion for a resolution
Paragraph 12 a (new)
Paragraph 12 a (new)
12a. Welcomes the activities of the IFRS Foundation/IASB in carbon and climate reporting; is in particular of the opinion that key long-term structural issues such as the valuation of stranded carbon assets in undertakings' balance sheets should be explicitly added to the IFRS working programme with a view of developing related standards; calls on the IFRS bodies to put the challenge of carbon reporting and carbon risks on their agenda.
Amendment 82 #
Motion for a resolution
Paragraph 12 b (new)
Paragraph 12 b (new)
12b. Calls on the Commission and EFRAG to examine the shift in pension asset allocation from equities to bonds as a result of the introduction of the mark- to-market accounting under IFRS; (Amendment inspired by Pensions Europe)
Amendment 83 #
Motion for a resolution
Paragraph 13
Paragraph 13
13. Supports the Commission in urging the IFRS Foundation to ensure that use of the IFRS and the existence of a permanent financial contribution are conditions for membership of the governing and monitoring bodies of the IFRS Foundation and of the IASB; calls on the Commission to explore ways to reform the IFRS Foundation and the IASB to end veto rights of members which do not fulfil the aforementioned criteria;
Amendment 84 #
Motion for a resolution
Paragraph 13 a (new)
Paragraph 13 a (new)
13a. Notes that the IASB is dominated by private actors and consists of 'Big 4' Audit companies, securities and exchange commission authorities, and a number of former executives of big banks; points out that medium-sized businesses are not represented at all; underlines that the IFRS Foundation continues to rely on voluntary contributions, often from the private sector which may give rise to a risk of conflicts of interests; notes that the remuneration of the IASB Board members does not correspond with the public interest orientation;
Amendment 85 #
Motion for a resolution
Paragraph 13 b (new)
Paragraph 13 b (new)
13b. calls on the Commission to urge the IFRS Foundation to base its financing entirely on fees or public sources and to eliminate excessive remuneration to Board members (in 2014: £554,000 for the IASB Chair, £488,500 for the IASB Vice-Chair and an average of £455,700 for other full-time IASB members);
Amendment 86 #
Motion for a resolution
Paragraph 13 c (new)
Paragraph 13 c (new)
13c. Is of the opinion that ultimately the IASB should be transformed into a public standard setting mechanism under the aegis of an international treaty;
Amendment 87 #
Motion for a resolution
Paragraph 13 d (new)
Paragraph 13 d (new)
13d. Calls on the Commission to find a solution to ensure that the European representatives in the IASB are democratically elected;
Amendment 88 #
Motion for a resolution
Paragraph 13 e (new)
Paragraph 13 e (new)
13e. Calls on the IFRS Trustees, the IFRS Monitoring Board and the IASB to promote an appropriate gender balance within the respective forums;
Amendment 89 #
Motion for a resolution
Paragraph 13 f (new)
Paragraph 13 f (new)
13f. Deplores that access to IASB's documents is restricted to the current year's unaccompanied English language Standards and official Interpretations and therefore calls on the IASB to grant access to the full guidance;
Amendment 90 #
Motion for a resolution
Paragraph 13 g (new)
Paragraph 13 g (new)
13g. Recalls its request made in the Goulard report for the introduction of comprehensive standards and procedures for enhancing democratic legitimacy, transparency, accountability and integrity in all international bodies with EU involvement including inter alia the IFRS; considers that these comprehensive standards should, inter alia, concern: - relations with the public (for example public access to documents, open dialogue with diverse stakeholders, the establishment of mandatory transparency registers and rules on transparency of lobby meeting) as well as the active involvement of trade unions, SMEs and Civil Society Organisations (CSOs); - internal rules (for example human resources based on skills, sound financial management, prevention of conflict of interests); - the adoption of an inter-institutional agreement with the aim of formalising a 'financial dialogue', to be organised with the European Parliament for the purpose of establishing guidelines regarding the adoption and the coherence of European positions in these international institutions;
Amendment 92 #
Motion for a resolution
Paragraph 14
Paragraph 14
14. Emphasises that the EFRAG reform will improve the European contribution to the development of the new IFRS; asks the Commission to explore the possibility as envisaged by the Maystadt report to parallel the existing 'carve-out' system (the temporary or permanent suspension of parts of standards) with a 'carve-in' mechanism that mandated EFRAG, or another entity, to develop rules specific to the needs of European stakeholders and include them into European IFRS if European overarching objectives and principles such as public good orientation, prudence and reliability are not reflected in the international accounting setting process;
Amendment 98 #
Motion for a resolution
Paragraph 16
Paragraph 16
16. Welcomes the EFRAG reform which took effect on 31 October 2014; calls on the Commission to propose the extension of the Union Programme for EFRAG for the period 2017-2020; takes note of the improved transparency but calls on EFRAG to publish annually statistics on responses from the public; deplores that as far as the funding of EFRAG is concerned and, in particular, the possibility of establishing a system of compulsory levies paid by listed companies, the Commission has focused its efforts on implementing parts of the reform that are achievable in the short term; asks the Commission to take – as recommended in the Maystadt report – formal steps to encourage the Member States that do not already have a National Funding Mechanism to establish one; calls on the Commission to propose the extension of the Union Programme for EFRAG for the period 2017-2020 but to put part of the budget into the reserve until the Maystadt recommendations as well as the recommendations in this report are fully put in place;
Amendment 99 #
Motion for a resolution
Paragraph 16 a (new)
Paragraph 16 a (new)
16a. Deplores that the requirement suggested by Maystadt to combine the functions of the CEO of EFRAG and the Chairman of EFRAG TEG was turned into a possibility; notes that the composition of the new Board deviates from Maystadt's proposal as the European Supervisory Authorities and the European Central Bank declined to accept full membership of the Board; calls on EFRAG to extend the number of users, currently only one, in the Board and to ensure that all relevant stakeholders are represented in EFRAG; (Amendment inspired by Pensions Europe)
Amendment 101 #
Motion for a resolution
Paragraph 17
Paragraph 17
17. Welcomes the fact that in 2014 the PIOB diversified its funding and the IFAC funding contribution was less than two- thirds of the total annual PIOB funding; notes that there was therefore no need for the Commission to limit its annual contribution, as stipulated in Article 9.5 of Regulation (EU) No 258/2014 of the European Parliament and of the Council; deplores that in the view of the financial crisis 2007 with several proofs of misstatement and in the light of the Luxleaks scandal 2014, PIOB obviously has failed to ensure integrity in the audit profession; calls, therefore, to put part of the budget into the reserve until PIOB has shown how to address the severe problems incurred;