Niall Collins (Limerick County, Fianna Fail) | Oireachtas source

Fianna Fáil supports the swift transposition into Irish domestic law of the Companies (Amendment) Bill 2017. The Bill will extend the current expiry date of 31 December 2020 to enable qualifying companies, incorporated in Ireland, to prepare and file financial statements using US Generally Accepted Accounting Principles, US GAAP, rather than International Financial Reporting Standards, IFRS. The extension is for ten years to December 2030.

In 2009, under a Fianna Fáil-led government, a temporary exemption was introduced that enabled companies to prepare their financial statements in accordance with US GAAP. This was subsequently referenced under section 279(2) of the Companies Act 2014. The Bill will give long overdue legal certainty and clarity to the companies concerned by strengthening the regulatory competitiveness of Ireland in this area and secure jobs into the medium term. This is more salient than ever with Brexit on the horizon and a more competitive business landscape likely in the US under the new administration.

There was an impending requirement for SEC-listed and Irish incorporated companies to file accounts under both US GAAP and IFRS. However, a previous convergence project between both standards has stalled. Fianna Fáil has pressed for this expiry extension over the last 18 months and on Committee and Report Stages of the Companies (Accounting) Bill 2016 in the Dáil, in order to safeguard the 8,000 high skilled jobs regionally located by these companies in Ireland.

Legal certainty was urgently needed by these companies who in the absence of any extension to the 2020 expiry date would have had to start making extensive preparations to meet the standards required by IFRS guidelines. The deadline for the 2020 expiry date would effectively have been 2018.

It has been estimated that the cost of introducing and implementing this IFRS requirement would be a minimum of $20 million before the end of each company’s financial year in 2017, due to the reallocation and introduction of extra resources and staff training, while streamlining the systems required to meet these compliance obligations.

It is therefore a damning indictment of successive Fine Gael-led governments in failing to do everything within their power to safeguard these high quality jobs, which number approximately 8,000 in this case. It was only after Fianna Fáil indicated on Report Stage of the Companies (Accounting) Bill 2016 in the Dáil that we were going to introduce an amendment in the Seanad to extend the current expiry date that the Minister - magically at the eleventh hour - was able to fast forward legislative proposals at Cabinet last week to show cause on this issue. This amendment flagged by Fianna Fáil has expedited the legislative process for this issue and has thankfully awoken the Government.

Fine Gael has constantly kicked this issue to touch, showing tacit prioritisation and publishing the heads of another Bill, the Companies (Statutory Audits) Bill, in February to address this issue. However, this would have kicked the can further down the road until the second half of 2017 at the earliest, as companies continue to incur costs due to inaction. This is all the more astounding considering that similar exemptions are currently in place in a number of European countries, including Switzerland, France, the UK, the Czech Republic and Germany.

In conclusion, we are happy to support the Bill in its entirety.

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