Council agreement on revision of accounting directives
By Ophélie Spanneut | Thursday 21 June 2012
Determined to move forward speedily, the Danish EU Presidency steered through Council a general approach
(1), on 21 June, on revision of the accounting directives, even as discussions get bogged down in the European Parliament under numerous amendments.
The draft directive on annual financial statements, consolidated financial statements and related reports of certain types of undertakings, presented by the European Commission in October 2011, aims to reduce the administrative burden and improve the comparability and clarity of financial statements for companies in the EU. The controversy chiefly concerns its Chapter 9, which obliges the extractive industries (ores, oil and natural gas) and loggers of primary forest to disclose payments made to governments of the countries where they exercise their activities. The declaration by European undertakings must be broken down in accounting reports by country and by project (see
While the Commission proposes to set the threshold for amounts to be declared on an ex post basis under the delegated acts procedure, the Council places the bar at €500,000. In the European Parliament, rapporteur Klaus-Heiner Lehne (EPP, Germany) proposes the same level, while members of the Committee on Development (DEVE) call in their opinion for such information to be disclosed from €15,000. Another key provision is the breakdown by project. The member states delete this point, to the great regret of NGOs. Global Witness finds that without this obligation, payments related to a given project, even if they involve huge bonuses and royalties, will not have to be disclosed. Brendan O’Donnell, in charge the Global Witness campaign, finds the Council threshold “too high” and says it will not reveal all payments that are meaningful to local communities.
On general accounting obligations, the Commission’s text introduces specific rules for small enterprises to reduce their administrative burden. It also harmonises thresholds for the companies concerned so that structures of the same size enjoy equivalent conditions in the EU. The 27 add a flexibility clause to the definition of small enterprise to allow higher thresholds to be set. For John Davies, head of the Technical Department of the Association of Chartered Certified Accountants (ACCA), this “acknowledges that economic conditions vary significantly from state to state and that it is accordingly not reasonable to impose one standard set of thresholds to define small companies throughout the EU”.
Discussions by the EP’s Committee on Legal Affairs (JURI), on 18 June, brought to light the need for agreement on compromise amendments, thus postponing adoption of the report until September. The first-reading agreement sought by the Danish Presidency does not seem likely, according to the rapporteur.(1) The document is available at register.consilium.europa.eu/pdf/en/12/st11/st11442.en12.pdf