The purpose of EU rules is to:
- improve the way EU companies are managed
- make them more attractive to investors
- improve access to bank credits.
These rules are based on the principle that the EU should take action only where it is better placed to do so than individual national governments (subsidiarity). We also bear in mind companies' varying needs and sizes when designing reporting rules.
The laws underpinning our work are:
- The 2013 Accounting Directive (replacing the 4th and 7th directives) - this regulates how EU firms, including micro-companies, are to draw up their annual financial statements. It sets out new rules on:
- country-by-country reporting for the extractive (mining, oil, gas, etc) and logging sectors
- non-financial information to be provided by large EU companies.
- The 2002 International Accounting Standards Regulation and its implementing acts endorsing International Financial Reporting Standards stipulate that EU firms listed on regulated markets must prepare their consolidated financial statements in line with international standards designed by the International Financial Reporting Standards Foundation.
The Commission prepares its endorsement decisions of International Financial Reporting Standards on the basis of an advisory document produced by the European Financial Reporting Advisory Group. It consults the EU countries through the Accounting Regulatory Committee.
The Commission makes every effort to ensure that this framework works in the interests of EU companies and citizens, on the basis of efficient and robust governance principles. The recent Maystadt review on the governance of the European Financial Reporting Advisory Group and the current evaluation of the 2002 International Accounting Standards Regulation exemplify such principles.