Agreement on the revision of the EU Accounting Directives
On 9 April 2013, the European Council, Parliament and Commission informally agreed on the finalisation of a new Accounting Directive that aims at reducing the administrative burden of accounting and at enhanced transparency in the extractive industry. Detailed information on the content of the new Directive is not available yet.
In October 2011, the European Commission published proposals for the revision of the Accounting and Transparency Directives that aimed at introducing mandatory country-by-country reporting for multinationals in the extractive and forestry industries and new, simpler and (largely) harmonised accounting requirements for SMEs.
Although it is known that agreement has been reached, details are difficult to come by:
- The Irish Presidency of the Council of the EU has published a press release (available on the Presidency's website) which offers the following pieces of information:
- "Among the measures contained in the draft Directive are the reduction of reporting requirements for SMEs and the introduction of an exemption from preparing consolidated financial statements for small groups."
- "The Directive also incorporates a number of measures designed to enhance financial transparency. The provisions made for Country-by-Country Reporting will dramatically increase the transparency of payments made to governments by European companies involved in the extractive industries."
- The European Commissioner for Internal Market and Services, Michel Barnier, has published a statement (available in English and French on the EU website) that explains which companies will be subject to the country-by-country reporting requirements (listed and large non-listed companies with activities in the extractive industry and loggers of primary forests) and how reporting will be structured:
- "The new agreement establishes rules ensuring that these companies disclose payments to governments (e.g. taxes on profits, royalties, and licence fees) on a country and project basis. Reporting would also be carried out on a project basis, where payments have been attributed to specific projects. The text requires the Commission to review the possibility of extending the disclosure requirements to other sectors."
- "The revised Accounting Directives defines a large company as one which exceeds two of the three following criteria: Turnover €40 million; total assets €20 million and employees 250."
- The German Ministry of Justice has published a press release (available in German only on the Ministry's website) offering the following slightly more detailed information (our translation):
- "The new Accounting Directive introduces a mandatory country-by-country reporting for large and capital market oriented entities with activities in the extractive industry and the primary forest industry. [...] The materiality threshold is set at €100,000."
- "The Directive also offers the possibility to raise the thresholds below which companies are classified as small by roughly 20% compared to today."
- "Furthermore, the future amount of mandatory disclosures will be limited to a common European level."
The preliminary agreement requires final approval by the Committee of Permanent Representatives.
We will inform you on IAS Plus if more detailed information becomes available and as soon as the full text of the Accounting Directive is published in the Official Journal.