Every entity in a group keeps its statutory books under the framework its home law prescribes, which may differ from the framework used for group reporting. The EU requires IFRS only for the consolidated accounts of listed companies and leaves other choices to Member States; Germany still requires HGB accounts in German and in euros; the UK allows IFRS or UK GAAP; the US requires US GAAP for SEC filers but accepts IASB IFRS from foreign private issuers. In the UAE the corporate tax law ties taxable income to accounts prepared under accepted standards, in practice IFRS.
Group framework and local framework are separate decisions
A foreign-owned subsidiary usually reports twice: a reporting package in the parent's framework for consolidation, and statutory accounts under local law. In the EU, the IAS Regulation makes IFRS compulsory only for the consolidated accounts of companies whose securities trade on an EU regulated market, from 2005; each Member State then decides whether to permit or require IFRS for individual accounts and for unlisted groups.
Germany shows the consequence. Whatever framework the group uses, a German GmbH's annual financial statements must be prepared in German and in euros under the Commercial Code (HGB). The UK is more flexible: statutory accounts may follow either IFRS or UK GAAP, so a UK subsidiary of an IFRS group can align its statutory accounts with group reporting.1234
United States: US GAAP for SEC filers, IFRS for foreign private issuers
At federal level, financial statements filed with the SEC that are not prepared under US GAAP are presumed misleading unless the SEC provides otherwise. Foreign private issuers are the main exception: they may file under IFRS as issued by the IASB without reconciliation, or under another comprehensive basis with a reconciliation to US GAAP.
Privately held US subsidiaries that file nothing with the SEC are outside these rules; their framework is set in practice by the parent's reporting needs, lenders and any state requirements, which were not researched here.56
Gulf markets: accounting standards through the tax law
The UAE corporate tax law computes taxable income from financial statements prepared under accounting standards accepted in the State. A secondary summary states that this means IFRS, with the cash basis available to businesses with revenue up to AED 3 million or with Federal Tax Authority approval. The Ministerial Decision setting the standards could not yet be checked, so the use of IFRS for SMEs is listed as a gap.
For Saudi Arabia, India and Singapore the national framework (IFRS as endorsed by SOCPA, Ind AS and its applicability thresholds, and SFRS(I) or SFRS) could not be confirmed on an official page and is listed in the gaps rather than stated.78
| Market | Rule | Language or currency point | Source |
|---|---|---|---|
| United Kingdom | IFRS or UK GAAP | Not stated in the source | GOV.UK, Annual accounts |
| Germany | HGB; use of IFRS individual accounts not confirmed | German language and euros | § 244 HGB; Regulation (EC) 1606/2002 Art. 5 |
| EU listed groups | IFRS as adopted in the EU for consolidated accounts | Not applicable | Regulation (EC) 1606/2002 Art. 4 |
| United States (federal, SEC filers) | US GAAP; IASB IFRS for foreign private issuers | Not applicable | Regulation S-X Rule 4-01 |
| UAE (corporate tax) | Accounting standards accepted in the State; IFRS per secondary source | Not confirmed | Decree-Law 47 of 2022 Art. 20; PwC summary |
| Saudi Arabia, India, Singapore | Not confirmed | Not confirmed | See gaps |
Decisions to make
- Will the subsidiary's statutory accounts use the group framework or a separate local framework?432In the UK IFRS is an option, while in Germany HGB accounts in German and euros are required, so a separate set of statutory accounts and adjustments may be needed.
- Is any group entity, or the parent, listed on an EU regulated market or filing with the SEC?156Listing triggers mandatory IFRS consolidated accounts in the EU and US GAAP or IASB IFRS for SEC filings.
- Which standards will the UAE entity use for its tax computation, and does it qualify for the cash basis?78UAE taxable income starts from the financial statements, so the framework choice affects the tax base.
- Who will translate and convert the accounts for each local filing?3German statutory accounts must be in German and in euros even where the group reports in English and another currency.
Documents usually needed
- Group accounting manual with the reporting package format and timetable
- Mapping of local statutory framework to group framework (GAAP differences schedule)
- Local statutory chart of accounts and trial balance
- Board or shareholder resolution on the framework chosen where law allows a choice
- Translation of accounts into the local language where required
Common mistakes
- Assuming IFRS group reporting satisfies German statutory requirements
- Filing UK accounts that switch between IFRS and UK GAAP without considering the rules on changing framework
- Treating US GAAP as a legal requirement for a private US subsidiary that files nothing with the SEC
- Preparing UAE tax computations from management accounts rather than financial statements under accepted standards
- Leaving functional currency and presentation currency choices to year end
Questions businesses ask
Can a German subsidiary file IFRS accounts instead of HGB accounts?
The EU leaves this to Member States. German law requires annual financial statements in German and in euros under the HGB. Whether IFRS individual accounts can be used, for example for publication, was not confirmed.23
Does a UK subsidiary of an IFRS group have to use IFRS?
No. UK statutory accounts may be prepared under IFRS or UK GAAP.4
Can a non-US company list in the US using IFRS?
Yes, a foreign private issuer may file financial statements under IFRS as issued by the IASB without reconciling to US GAAP.6
What this guide does not yet confirm
These points need checking with a qualified local professional before you rely on them.
- The IFRS Foundation jurisdiction profiles could not yet be checked (access not approved), so IFRS adoption status by country is not stated.
- India: the Companies (Indian Accounting Standards) Rules and Ind AS applicability thresholds could not yet be checked on the MCA site.
- Singapore: which companies use SFRS(I) or SFRS could not be confirmed on the ACRA accounting standards page.
- Saudi Arabia: the requirement to use IFRS as endorsed by SOCPA was not confirmed on an official page.
- UAE: Ministerial Decision No. 114 of 2023 on accounting standards could not yet be checked; the IFRS point rests on a secondary source.
- German rules on IFRS individual accounts for disclosure (§ 325 Abs. 2a HGB) could not yet be checked.
Sources and review status
Each statement is numbered to the source it was checked against. We use official sources where we can, and each statement says whether it was checked against an official or a secondary source. Sources last checked on 19 October 2026. None of it has been professionally reviewed yet: it is research checked against official and secondary sources by WONE Global, not legal or tax advice.
Companies governed by the law of an EU Member State whose securities are admitted to trading on a regulated market in any Member State must prepare their consolidated accounts under adopted international accounting standards (IFRS as endorsed in the EU). Consolidated accounts for financial years starting on or after 1 January 2005; applies by reference to the balance sheet date.
EU Member States may permit or require adopted international accounting standards for the individual annual accounts of listed companies and for the consolidated or annual accounts of companies that are not listed. Member State options; the choice made by each Member State must be checked in national law.
German annual financial statements must be prepared in the German language and in euros. Every merchant (Kaufmann) preparing annual accounts under the HGB, including German subsidiaries and GmbHs of foreign groups.
Statutory accounts must be prepared under either International Financial Reporting Standards or UK Generally Accepted Accounting Practice. UK companies' statutory accounts.
Financial statements filed with the US Securities and Exchange Commission that are not prepared under US generally accepted accounting principles are presumed to be misleading or inaccurate, unless the Commission has provided otherwise. Federal; companies filing financial statements with the SEC. Private companies not filing with the SEC are outside this rule; state law and lenders set their reporting.
Regulatory text read on the Cornell Legal Information Institute reproduction of the Code of Federal Regulations; the eCFR at ecfr.gov is the government publication.
A foreign private issuer may file financial statements with the SEC under IFRS as issued by the IASB without reconciliation, or under another comprehensive basis of accounting with a reconciliation to US GAAP. Federal; foreign private issuers only.
Regulatory text read on the Cornell Legal Information Institute reproduction of the Code of Federal Regulations; the eCFR at ecfr.gov is the government publication.
UAE corporate tax is computed from financial statements prepared for financial reporting purposes in accordance with accounting standards accepted in the State. Federal corporate tax, mainland and free zones. The accepted standards are set by Ministerial Decision.
For UAE corporate tax purposes, financial statements must apply IFRS, while taxpayers with revenue not exceeding AED 3 million, or in exceptional circumstances on application to the Federal Tax Authority, may use the cash basis. Federal corporate tax. Whether IFRS for SMEs may be used below a revenue threshold was not confirmed.
Secondary source used because the Ministerial Decision on accounting standards (understood to be No. 114 of 2023) could not yet be checked.
Questions on this topic
8 statements on accounting frameworks: ifrs, local gaap and ind as
