Brussels, 28/10/2010 (Agence Europe) - The European Commission has begun a public consultation exercise that will run until Wednesday 22 December on whether multinational companies should be required to publish financial information, country-by-country. Under a commitment made by the Commission as part of the process of reforming the EU financial supervision system, it will be publishing a report on this issue in the autumn of 2011.
Accounting directives current require companies listed on the stock exchange to list in their consolidated accounts the subsidiaries they own in other countries and their share in joint ventures or associated companies, but EU legislation does not require them to break down financial information about intra-group transactions or pre-tax profit on a country-by-country basis.
The Commission is considering two types of measures - introducing a general obligation for multinationals to list information country-by-country to improve transparency over capital flows with respect of taxation and also so that investors can better examine their activity; and the drawing up of special transparency rules for the extractive industry (ore, oil and natural gas) to increase transparency over the amount of cash paid to non-EU governments to win contracts. The United States has introduced the latter measure in its financial legislation covering some European countries quoted on US stock exchanges. The International Accounting Standards Board, a private body responsible for drawing up the International Financial Reporting Standards (IFRS), is working on financial disclosure requirements on a country-by-country basis. (M.B./transl.fl)