Brussels, 28/12/2005 (Agence Europe) - The European Commission has welcomed the European Parliament's vote in Strasbourg on 15 December 2005 approving the draft Directive amending the EU's accounting directives. Internal Market Commissioner Charlie McCreevy said: "This is good news. The approach followed by the European Parliament is totally in line with what I intend to achieve with Better Regulation."
Following a series of financial scandals (Enron and Parmalat, for example), the European Commission unveiled four root-and-branch amendments in October 2004 to EU accounting directives to restore confidence in companies' financial audits (see EUROPE 8817). The amendments will bring improved disclosure by obliging listed EU companies to provide annually a corporate governance statement and providing more insight into the use of off-balance sheet arrangements and unusual transactions with related parties, such as the spouse of a board member. The amendments to the Accounting Directives will also allow Member States to remove inconsistencies between IAS 39, the international accounting standard on fair value measurement, and the accounting directives, in line with the Commission Regulation of 15 November 2005 1864/2005 with regard to listed companies (see EUROPE 9069).
Thresholds (balance sheet total and net turn over) defining small and medium sized limited liability companies will be increased by 20%, to help cut companies' financial reporting requirements.