Europe: Commission proposes new Accounting Directive

The European Commission has a published a proposal to repeal the current Accounting Directives, replacing them (and their amendments) with a single, new Directive: see here (pdf). The proposal contains provisions to reduce the disclosure required by small companies and, for medium and large companies, it is proposed that certain principles - such as substance over form and materiality - should be mandatory in respect of information in the financial statements.

Other proposals include removing the EU law requirement for small companies to have an external audit and increased disclosure obligations on some companies in respect to payments made to governments. The Commission also states in its proposal that it considered the mandatory adoption of the IFRS for SMEs but it has decided not to advance this as a proposal, noting that there was not much experience worldwide regarding this new standard and it would not necessarily result in simplification or reduction in the administrative burden for companies.

For further information see: Commission press release | FAQs | Impact assessment: part 1 (pdf) and part 2 (pdf) |