The head of the European Commission's financial markets division said that public companies from the United States and Japan will be given another year to bring their accounting standards closer to new European Union standards.

Reports have said that it would cost hundreds of U.S. and Japanese companies whose stocks and bonds are traded in Europe at least $1 million each to convert their books to International Financial Reporting Standards.

The director general for financial markets, Alexander Schaub, said that the commission had been scheduled to decide by the end of 2005 on what rules would take effect in 2007, but that a full review of IFRS would probably take until the end of this year.

Several Japanese companies have already left the European capital markets, according to Japan's Financial Services Agency. In January 2004, there were 76 Japanese companies listed in EU markets, but only 32 in December.

In July, a panel of national regulators from EU countries, after a side-by-side comparison with rulebooks, recommended requesting additional information from companies in the United States, Japan and Canada. Financial services commissioner Charlie McCreevy recently suggested some delay in the equivalency decision in order to work out a mutual recognition agreement with the United States to take effect between 2007 and 2009.

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