Public consultation on country-by-country reporting
Oct 27, 2010
The European Commission is conducting a public consultation in order to gather stakeholders' views on country-by-country reporting by multinational companies. Country-by-country reporting is a concept that would require multinational companies to disclose financial information on their operations in third countries in their annual financial statements.
At present, issuers of securities in regulated markets in the EU are required to make public an annual financial report comprising, inter alia, a management report and the audited financial statements. When the issuer is required to prepare consolidated accounts, the audited financial statements must comprise consolidated accounts drawn up accordance with international accounting standards (IFRS). Currently, the applicable accounting standards do not require issuers to disclose financial information on a country-by-country basis in their consolidated accounts, although the Accounting Directives do require issuers to identify subsidiaries, jointly controlled entities and associates.
The IASB is currently working on a possible country-by-country reporting requirement which could be incorporated within a replacement Standard for IFRS 6 Exploration for and Evaluation of Mineral Assets. Once finalized, this standard is likely to become mandatory in the EU through the usual endorsement process under the IFRS Regulation.
The questionnaire for the consultation includes the following questions:
The questionnaire of the European Commission can be accessed here (link to EC website). Responses must be received by 22 December 2010.