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EU proposed directive on company capital

  • European Union (old) Image

09 Nov 2004

As part of its programme to simplify European rules on company capital, the European Commission has proposed to allow companies to use information about fair values of assets as reported in financial statements in accounting for shares issued in exchange for non-cash assets.

Currently, if non-cash assets are contributed to a corporation by investors in exchange for shares, EU law requires that the non-cash assets be valued by an outside expert. The proposed directive (law) would eliminate the requirement for outside expert valuation in several cases, including "where the value of the individual asset to be contributed upon proposal of the board is derived from audited accounts, provided that these have been established in accordance with the European Community's Accounting and Auditing provisions." Click for More Information on the EC Website.

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