The challenges of a new year
On 1st May 2004, the European Union is due to expand from its current fifteen member states to a new twenty-five member organisation. This process, known as enlargement, represents a set of serious opportunities and challenges for many European companies. Indeed, for most companies, coping with EU enlargement is, with the move to International Accounting Standards, one of the two main external events which will require attention over the next twelve months. From the treasurer’s perspective, both developments suggest that 2004 will not be a quiet year.
EU enlargement should represent an opportunity for treasurers to add value as cash and liquidity techniques common in Western Europe become more readily available in Eastern Europe. A number of banks have invested significant resources to develop their networks or partnerships in the ten countries due to join the EU next year. The challenge for treasurers is to achieve the most efficient cash management structures with the minimum effort. This may mean waiting rather than trying to establish arrangements for 1st May. There is no timetable for any of the ten countries to introduce the Euro, although they will have to meet the Maastricht convergence criteria beforehand.
The introduction of IAS will be more difficult. The pressure should be on now to ensure that all EU companies with a public listing are in a position to prepare accounts in accordance with IAS from 2005. Help from accountants should be sought now, as the closer it gets to 2005, the fuller accountants’ diaries will get.
2004 will be a busy year. Relax and enjoy the seasonal festivities to be ready for the challenges!