Europe sets ball rolling on accounting reforms
The European Commission this month unleashed a package of business administration and financial reporting reforms.
The responsibile busines project aims to unify the fourth (78/660/EEC) and seventh (83/349/EEC) European accounting directives into a single framework, accompanied by proposals to introduce country-by-country reporting for extractive industries. More corporate responsibility reporting is on the cards as part of the commission’s related “social business initiative”.
Introducing the package, the commission said it had adopted “small first” as a guiding principle to lessen the administrative burden on European businesses. The proposed “mini-regime” would allow small firms to fulfil their statutory accounting requirements with a simpler profit and loss account, balance sheet and a limited number of accompanying notes. There would also no longer be an EU requirement for small companies to have an audit. The UK government has already signalled its intention to enact the reforms in this country.
When the UK government first highlighted the proposals back in June, AccountingWEB members gave them a hostile response - particularly in view of the additional requirement HMRC introduced this year to file electronic statutory accounts in iXBRL format alongside Corporation Tax returns.
“No sooner have we tooled up for iXBRL than they abolish it,” quipped AccountingWEB member Carnmores, while laronde123 added: “Most micro business do not keep proper accounts and therefore without the assistance and overview of an accountant would not be able to produce accurate accounts.”