Mary White (Fianna Fail)

I welcome the Minister and compliment him on his speech. It brings us up to date on the agenda of the Government to make Ireland the best place to do business. The Minister gave a first class presentation on the up-to-date position.

As the Minister pointed out, one in every seven jobs in the Irish economy is the result of direct or indirect foreign investment, but 99.99% of Irish people do not realise that. After all the years of foreign direct investment, and the continued success of that investment in Ireland, most Irish people still do not realise the contribution it makes. It is positive for Ireland that despite our and Europe's financial woes companies considering investing abroad are still very happy with what is happening in Ireland. At present, they are the drivers of our economy and are keeping it stable. I congratulate the Minister on the work he has done in going around the world to spread the story of Ireland and in retaining international investors' confidence in this country.

The Bill extends the period in which companies can avail of using a different accounting standard from the accounting standards that prevail in Ireland. The exception was introduced in the Companies (Miscellaneous Provisions) Act 2009 by Fianna Fáil. It was part of an evolving economy that kept up its standards for attracting investment. One of the secrets of Ireland's success has been that no Government or political party, for a long time, has had a divergent view on how the economy should be developed. We are all in agreement on the importance of foreign direct investment. The extension of the period is necessitated by delays in the convergence of two international accounting standards, the US generally accepted accounting principles, GAAP, and international financial reporting standards, IFRS.

By extending the definition of relevant parent company or undertaking, this Bill includes companies which had not been required to make an annual return to the registrar of companies before the date on which the Bill comes into operation or those companies which used US generally accepted accounting principles in accordance with the 2009 Act since 23 December 2009. The Bill also extends the expiry date which currently applies to the use of US generally accepted accounting principles. At present, this is limited to four financial years, with an expiry date of 31 December 2015. The amendment contained in the Bill will alter this by removing the four-year period and imposing an expiry date of 31 December 2020. The Bill also amends the timeframe within which the Minister for Jobs, Enterprise and Innovation may make regulations under section 2 of the 2009 Act. Currently, the Minister may make regulations allowing for the use of other internationally recognised accounting standards. These regulations are subject to the time limits and expiry date set out in the 2009 Act. The amendments contained in the Bill alter the wording of section 2 of the 2009 Act to reflect the removal of the four-year period and the extension of the expiry date from 2015 until 2020.

Standard accounting practices require companies to follow certain accounting rules when presenting financial statements in order that the readers of the statements can comprehend the financial health of the company. Unfortunately there is no worldwide agreement on the accounting rules and standards vary for different countries and for different types of companies within a country. Some commonly used accounting standards include the generally accepted accounting principles of the United States, which are known as GAAP, as well as the United Kingdom's generally accepted accounting principles, which Ireland follows. This standard is known as UK generally accepted accounting principles or occasionally as Irish generally accepted accounting principles. There also are the generally accepted accounting principles of France and the international financial reporting standards, IFRS, which also are used in Ireland. The lack of uniform accounting standards is particularly problematic when a company works across borders and under two different accounting standards. As for convergence of such accountancy standards, work is ongoing by global accounting bodies to unify the US generally accepted accounting principles and the international financial reporting standards. While it had been hoped these two standards would be unified by 2015, the delay in the harmonisation process necessitates this Bill to give companies confidence as to their future accounting rules.

In conclusion, this Bill eliminates inherent waste and the burden of red tape, which is the bête noire of businesses and companies that are trying to invest and move fast on delivery of their projects. Mr. Sean O'Driscoll of Glen Dimplex recently appeared before the Joint Committee on Jobs, Social Protection and Education and it would be worth the Minister's while to study his contribution. He raised the point, in an excellent speech drawn from his own practical experience, about the number of regulations made here that inhibit businesses from developing. Allowing companies under certain circumstances to use the US generally accepted accounting principles framework makes Ireland a more attractive destination for foreign direct investment companies. I thank the Minister and wish him continued good luck on his journey.