Directive 2003/51/EC amends Directives 78/660/EEC, 83/349/EEC, 86/635/EEC and 91/674/EEC on the annual and consolidated accounts of certain types of companies, banks and other financial institutions and insurance undertakings. These Directives define which types of companies have to produce accounts, establish which format should be used for the profit and loss account and the balance sheet and lay down which valuation principles should be applied. The Directives also impose disclosure requirements.

The IAS Regulation, adopted in June 2002, requires all EU companies listed on a regulated market - or those with listed debt instruments - to use IAS from 2005 onwards and allows Member States to extend this requirement to all companies. Where IAS are not applied, the 4th and 7th Company Law Directives (78/660/EEC and 83/349/EEC), also known as the Accounting Directives, will continue be the basis of EU accounting requirements and may therefore remain applicable to up to five million companies in Europe. They needed to be modernised.

Directive 2003/51/EC brought EU accounting requirements into line with modern accounting theory and practice. It allows Member States which do not apply IAS to all companies to move towards similar, high-quality financial reporting. In doing so, all inconsistencies with International Accounting Standards (IAS) have been eliminated.