It was required because of the importance of SMEs to the European economy and the non-harmonised accounting legislation adopted for them which is not regulated at EU-level.
The key objectives of the study were:
- to provide information about the current most recurring legal requirements in Europe for those European SMEs which are not covered by harmonised EU accounting rules;
- to present findings on the most recurring legal requirements in comparison with the users' and preparers' needs in specified accounting areas for those European SMEs which are not covered by harmonised EU accounting rules.
The main findings of the study were:
- the smaller the size of the entity, the less legal accounting requirements are enforced by law and the less users and preparers indicate any particular preference or need for accounting information;
- the desk research revealed that the smaller the size of the entity, the more perceived administrative burdens were identified in many EU countries;
- for the smaller size entities in particular, preparers tend to produce more information (e.g. cash flow statements) than what is usually legally required;
- users of micro-sized entities revealed a clear need for a profit and loss account and a balance sheet as these entities do not have the legal obligation to prepare financial statements.