• Structure of the Directives
• General principles of accounting recognition and measurement
• Size criteria for micros, small, medium, and large entities
• Which financial statements should be required for each category
• Electronic filing
• Financial statement formats
• Footnotes
• Valuation (measurement) issues
• Consolidation requirements

Comment with regard to accounting options and national 'add-ons' to the Directives

In our view, the Directives should, in principle, not provide Member State options concerning pure accounting (ie, the recognition and measurement of assets and liabilities). The harmonisation of accounting within the European Union benefits users (increased comparability of accounts within the EU) and preparers (reduced costs for groups of companies and economies of scale generally), and generally facilitates cross-border trade and services, including accounting and audit. However, we recognise that Member States use accounting information in different ways and so the need to provide certain options may continue as regards additional information that may be required under tax or corporate governance law or practices or requirements that can be deemed to depend upon the specific business environment of a Member State. The onus will be on Member States to justify the additional costs to business of making use of these options, or providing additional requirements to those set out in the Accounting Directives, upon the basis of the specific Member State context.

Comment with regard to the IFRS for Small and Medium-sized Entities

In the short and possibly medium term, the (revised) Accounting Directives will continue to form the European legal accounting framework for non listed companies. However, we do not believe this should remain the case in the long term as by their nature Directives are not flexible enough to rapidly reflect changing economic needs and do not necessarily reflect views from beyond Europe. We support convergence toward a single set of high-quality global accounting standards, adapted as required for entities that are not publicly accountable and SMEs, prepared through a robust and independent standard-setting process, and that maintaining a parallel European framework for the long term would not be a good use of resources or benefit European preparers and users.

We ask that the Commission work towards providing a mechanism for Member States to opt to use directly the forthcoming standard from the IASB on accounting for non-publicly accountable entities. This mechanism should be based on the test that the accounting requirements of the Directives are met through use of that simplified IFRS.

Click to view our Response to the European Commission Proposals (PDF 7,765k).