European securities regulators say that accounting practices used in Canada, Japan and the U.S. can be considered equivalent to international financial reporting standards.

The Committee of European Securities Regulators confirmed Tuesday its earlier initial technical assessment of equivalence between the Generally Accepted Accounting Principles used by companies in the three countries and IFRS, subject to a number of remedies (essentially disclosures). Adopting high quality international reporting is essential for fostering the integration and efficiency of global capital markets, the CESR says.

In order to address particular concerns expressed by respondents, CESR’s final advice has been revised to clarify the way companies reporting under GAAP would be expected to provide additional information to EU financial markets, for transactions or events recognized under GAAP that are material and relevant for investors. Also, the concepts of materiality and relevance have also been more fully explained.

The CESR also concluded that companies reporting under Canadian, Japanese and U.S. GAAP are not expected to do a complete reconciliation of their financial statements to IFRS. Rather, they are primarily expected to include disclosures of significant differences.

The final advice has streamlined the approach to situations in which an accounting issue is not included in the list of significant GAAP differences. They are expected to be exceptional and, when they occur, they should be covered by additional disclosures when related to transactions or events that could be material and relevant to investors’ decisions.