EC's Capital Markets Union action plan includes consultation with the IASB on a tailor-made accounting solution for European SMEs

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30 Sep, 2015

The European Commission (EC) has adopted an action plan setting out 20 key measures to achieve a true single market for capital in Europe. The project aims to boost growth in the EU with the creation of a single market for capital and break down the barriers that are blocking cross-border investments in the EU and preventing businesses from getting access to finance.

As part of the overall project, the EC launched a public consultation in February 2015. One of the questions in the consultation paper had been whether there is value in developing a common EU level accounting standard for small and medium-sized entities (SMEs). The feedback statement on the consultation released together with the action plan reveals that while some respondents considered that the current situation is appropriate and should not be changed, most respondents considered that some kind of initiative or incentive, legislative or other, is needed to render EU SMEs more attractive to European and international investors through enhanced transparency and comparability of relevant financial information. Rather than a full application of the IFRS or use of the IFRS for SMEs, many respondents suggested that a pragmatic IFRS-based solution be found in order to deliver for SMEs the advantages of a high-quality, comparable, international set of accounting rules, whilst avoiding excessive administrative burden and costs, particularly in relation to disclosure.

Accordingly, the action plan states:

The Commission will also explore with the International Accounting Standards Board (IASB) the possibility of developing a voluntary tailor-made accounting solution, which could be used for companies admitted to trading on SME Growth Markets.

The action plan was published together with a wealth of additional information on the EC's website. Please click to access:

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