Damien English (Meath West, Fine Gael)

I have a couple of questions for the Minister of State. I accept the contents of his speech and believe the motives are right as regards trying to attract foreign business to Ireland. Is this a common initiative across Europe, and have many other countries done it? I accept when we were changing years ago to the IFRS system, sufficient time was given to companies. However, have other countries implemented similar measures for specific companies? I have not seen a list of these companies, either, but have they received guarantees that this would happen? They assume this will be passed in the Oireachtas, or is it unfair to suggest this?

Part 2 of the Bill gives the Minister for Enterprise, Trade and Employment power to prescribe other internationally recognised accounting standards. My understanding is that there are only two international standards, the US GAAP and the EU IFRS. Is there something else I do not know or are there local standards to be considered, as well? I know about the two international standards and everything else, in the event, would be "local GAAP", depending on the particular country. Are we giving the Minister power to accept the "local GAAP" of Slovenia or some other country, or are we missing something here? That needs to be clarified today, even while in general we are in agreement on this. I am not aware of any other international standards but if there are the Minister of State should outline them.

It is important that the Minister of State deals with this when replying to the debates. I know of only about five areas in which there is a difference between the two accounting systems, the US GAAP and the EU IFRS. Asset valuation is one of them. That generally only affects paper profits, but the House needs clarification in terms of whether this has tax implications in Ireland. I do not believe it has and that it is largely to do with presentation, but in any event, the Minister of State should clarify the position in this regard.

Without knowing the companies the Minister of State has in mind, I would say that research and development costs are of major importance in this legislation. Under US GAAP this is entitled to be written off immediately as an expense, whereas under the IFRS it can be capitalised and written off over a number of years. That will affect profits and therefore has to affect tax. Again, are we just talking about paper profits or will it affect the bottom line and the taxes payable to this country?

I accept we want to create jobs and bring in more foreign companies, but we must also have fair play. All companies operating in Ireland must work to the same system. Generally, on the question of taxes, one cannot have a situation where one company will have more advantage than another. If the legislation is to disadvantage existing Irish companies, that would be somewhat unfair. This will affect the presentation of accounts. Therefore when the stakeholders, whether investors, pension funds, etc., come to look at these companies relative to others operating in Ireland, there might be unfair comparisons.

An unfair advantage might accrue to those companies given permission to use US accounting principles, since they will be able to present their accounts differently. In the event, these accounts will look different to the non-educated person who wants to make a quick decision as regards investing, or who may have other reasons for looking at a company. There are implications in all of this and it is not just a simple matter of allowing this set of procedures for four years. The implications can have knock-on effects for everyone availing of such accounting information. That aspect should be discussed here as well, and clarified.

Who determined the four year interval, or why is that being used? My understanding is that already there is a roadmap to converge international accounting standards under the Norfolk agreement, which provided for changes to commence in 2009, with bigger changes scheduled for 2010-11. Is that initiative based on a four-year plan, and in the event, is that the reason why a four-year period was decided on? Will the Minister of State clarify this because there must be some reason for it?

Although we all want to see more jobs being created that does not mean we are going to accept a Bill, willy-nilly. There is lack of information in the presentation of this Bill. The answers to many questions could have been contained in the Minister of State's speech. Such answers should be forthcoming at some stage before the Bill passes through the House, because they touch on important matters. Any acceptance of somebody else's standards is very important. As my colleague, Deputy O'Keeffe has mentioned, it could impact on Ireland's reputation. Ireland does not want to be seen as an easy mark in terms of changing standards. Will this mean that if a company arrives here next year from South Africa or wherever, we will have to accept their accounting norms? Are we setting ourselves up for other problems down the line?

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