The European Parliament voted this
month to accept the European Commission’s proposal to exempt micro
businesses from the reporting requirements of the Fourth
Directive.
If the European Council now supports the
proposal, each member state will be allowed to decide whether the
very smallest companies will have to produce financial reports.
Updating directives
The micros’ exemption is one aspect of a wider
EC review of its accounting directives.
The review also included a consultation on the
potential role for IFRS for SMEs in Europe, which closed this
month.
The majority of stakeholders from the
accounting profession have suggested member states should be
allowed to choose whether or not to implement IFRS for SMEs.
Other options for the EC include preventing
member states from introducing the standards due to clashes with
the accounting directives, or deciding that all countries should
adopt IFRS for SME. Neither of these options seem likely.
Speaking with The Accountant, incoming
European Financial Reporting Advisory Group chair Françoise Flores
summed up the prevalent view: “Opening an option for member states
to permit or require IFRS for SMEs for their jurisdiction to me
sounds like a reasonable path,” she said.
