Internal Market, Industry, Entrepreneurship and SMEs

Study: Accounting requirements for SMEs

Study: Accounting requirements for SMEs
Published on: 28/07/2015
The objective of the study is to provide an overview of the accounting requirements in force and the good accounting practices adopted in 20 selected European Countries, and to identify users’ perceived needs for accounting information from SMEs in Europe, as well as SMEs’ own needs for accounting information in the non-financial business economy.

The key objectives of the study were:

  • to provide an overview of the accounting requirements in force and of the good accounting practices adopted in 20 European countries for all legal forms of enterprises;
  • to identify users' perceived needs for accounting information from SMEs in Europe, along with SMEs' own needs for accounting information in the non-financial business economy.

The main findings of the study were:

  • It can be concluded that even if there is some interest in the accounting documentation of medium-sized entities, this level of interest is lower and it decreases as the size of the entities decreases (i.e. small- and micro- sized).
  • As a general conclusion it can be noted that the results of the survey have clearly highlighted a perceived need for simplification of accounting requirements from both the users' and preparers' point of view.
  • The respondents to the survey showed a general need to reduce the accounting requirements already in force, insofar as they are perceived as non-essential to the internal needs of enterprise monitoring and management. This need increases as the size of the entity decreases.

General recommendations are:

  • possible policy initiatives aimed at an enhanced simplification of accounting shall take into account the size criterion (medium, small, and micro-sized) as a guideline for every kind of legislative initiative;
  • simplification of the accounting documentation requirements;
  • exemption from accounting requirements either by introducing new thresholds or by a harmonisation of the existing thresholds.