|Extent of IFRS application||Status||Additional Information|
|IFRS Accounting Standards are required for domestic public companies||All domestic companies whose securities trade in a regulated market are required to use IFRS Standards as adopted by the EU in their consolidated financial statements.|
|IFRS Accounting Standards are permitted but not required for domestic public companies|
|IFRS Accounting Standards are required or permitted for listings by foreign companies||IFRS Standards as adopted by the EU are required in their consolidated financial statements except that a foreign company whose home jurisdiction’s standards are deemed by the EU to be equivalent to IFRS Standards may use its home standards.|
|The IFRS for SMEs Accounting Standard is required or permitted||No.|
|The IFRS for SMEs Accounting Standard is under consideration||No.|
Profile last updated: 16 June 2016
The EASB was created by the Estonian Government under the Accounting Act of 2002 (as amended). The EASB’s function is to issue accounting guidelines explaining and specifying the Act. The EASB is an independent committee whose rules of procedure must be approved by the Government on the proposal of the Minister of Finance. Members of the EASB are appointed by the Government on recommendation of the Minister of Finance. The EASB support staff are provided by the Ministry of Finance.
Guidelines issued by the EASB are known as Estonian Accounting Standards or Estonian GAAP. The Minister of Finance has the right to issue mandatory precepts to the Standards Board but otherwise “shall not interfere with the content of the guidelines issued by the Standards Board or with the process of preparation thereof”.
As a member state of the European Union, Estonia is subject to EU 1606/2002 Regulation on the application of international accounting standards (IAS).
The EU IAS Regulation requires application of IFRS Standards as adopted by the EU for the consolidated financial statements of European companies whose securities trade in a regulated securities market starting in 2005. The EU IAS Regulation gives member states the option to require or permit IFRS Standards as adopted by the EU in separate company financial statements (statutory accounts) and/or in the financial statements of companies whose securities do not trade on a regulated securities market. See the Profile for the European Union for more detailed information about the EU IAS Regulation.
There is one regulated market in Estonia -- NASDAQ OMX Tallinn.
Estonia used the option under the IAS Regulation as follows:
Companies whose securities trade in a regulated market
Companies whose securities do not trade in a regulated market
In fact, IFRS Standards were required in Estonia even before the EU IAS Regulation – starting in 1998 for all listed companies and in 2003 for all financial institutions.
Required for some and permitted for others. Foreign companies whose securities trade in a regulated market in Estonia (and generally in the EU) are required to report under IFRS Standards as adopted by the EU for their consolidated financial statements unless the European Commission has deemed their local accounting standards to be equivalent to IFRS Standards, in which case they may use their local standards.
This is laid out on the ‘Financial Reporting’ page of the European Commission’s website.
The European Union has 24 official and working languages. They are: Bulgarian, Croatian, Czech, Danish, Dutch, English, Estonian, Finnish, French, German, Greek, Hungarian, Irish, Italian, Latvian, Lithuanian, Maltese, Polish, Portuguese, Romanian, Slovak, Slovene, Spanish and Swedish. Before they are published in the Official Journal of the European Union, and therefore become binding under EU law, individual IFRS Standards must be translated into all of those languages (other than English and Irish).
Pursuant to a copyright waiver agreement with the Directorate-General for Translation of the European Commission, the Commission takes care of the translation into the official languages according to their own translation process. The translation only covers the standards and mandatory guidance, which is then published in the Official Journal of the European Union.
In addition, some countries (usually the standard setter or institute) have a translation contract with the IFRS Foundation to produce an ‘official translation’ for publication of a bound volume of IFRS Standards (usually the ‘Red Book’) and publication, in some cases, of individual standards and exposure drafts.
The main differences between new Estonian GAAP (2013) and the IFRS for SMEs Standard are:
Most SMEs are permitted to choose between IFRS as adopted by the EU and Estonian GAAP. However, the following types of companies must use IFRS as adopted by the EU even if their securities do not trade in a regulated market: