1983L0349 — EN — 01.01.1995 — 001.001 — 1
This document is meant purely as a documentation tool and the institutions do not assume any liability for its contents
►B SEVENTHCOUNCILDIRECTIVE
of13June1983
basedontheArticle 54(3)(g)oftheTreatyonconsolidatedaccounts
(83/349/EEC)
(OJ L 193, 18.7.1983, p. 1)
Amended by:
Official Journal
No page date
►M1Eleventh Council Directive of 21 December 1989 (89/666/EEC) L 395 36 30.12.1989
►M2Council Directive of 8 November 1990 (90/604/EEC) L 317 57 16.11.1990
►M3Council Directive of 8 November 1990 (90/605/EEC) L 317 60 16.11.1990
Amended by:
►A1Act of Accession of Spain and Portugal L 302 23 15.11.1985
►A2Act of Accession of Austria, Sweden and Finland C 241 21 29.8.1994
(adapted by Council Decision 95/1/EC, Euratom, ECSC) L 1 1 1.1.1995
Corrected by:►
C1Corrigendum, OJ L 211, 3.8.1983, p. 31 (83/349/EEC)
▼B
SEVENTHCOUNCILDIRECTIVE
of13June1983
basedontheArticle54(3)(g)oftheTreatyonconsolidatedaccounts
(83/349/EEC)
THE COUNCIL OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Economic
Community, and in particular Article 54 (3) (g) thereof,
Having regard to the proposal from the Commission(1),
Having regard to the opinion of the European Parliament(2),
Having regard to the opinion of the Economic and Social Committee(3),
Whereas on 25 July 1978 the Council adopted Directive 78/660/EEC(4)
on the coordination of national legislation governing the annual accountsof certain types of companies; whereas many companies are members ofbodies of undertakings; whereas consolidated accounts must be drawnup so that financial information concerning such bodies of undertakings
may be conveyed to members and third parties; whereas national
legislation governing consolidated accounts must therefore be coordi-nated in order to achieve the objectives of comparability andequivalence in the information which companies must publish withinthe Community;
►
C1Whereas, in the determination of the conditions for consolidation,
account must be taken not only of cases in ◄which the power of
control is based on a majority of voting rights but also of those in whichit is based on agreements, where these are permitted; whereas,furthermore, Member States in which the possibility occurs must be
permitted to cover cases in which in certain circumstances control has
been effectively exercised on the basis of a minority holding; whereasthe Member States must be permitted to cover the case of bodies ofundertakings in which the undertakings exist on an equal footing witheach other;
Whereas the aim of coordinating the legislation governing consolidated
accounts is to protect the interests subsisting in companies with sharecapital; whereas such protection implies the principle of the preparationof consolidated accounts where such a company is a member of a bodyof undertakings, and that such accounts must be drawn up at least wheresuch a company is a parent undertaking; whereas, furthermore, the cause
of full information also requires that a subsidiary undertaking which is
itself a parent undertaking draw up consolidated accounts; whereas,nevertheless, such a parent undertaking may, and, in certain circum-stances, must be exempted from the obligation to draw up suchconsolidated accounts provided that its members and third parties are
sufficiently protected;
Whereas, for bodies of undertakings not exceeding a certain size,
exemption from the obligation to prepare consolidated accounts may bejustified; whereas, accordingly, maximum limits must be set for suchexemptions; whereas it follows therefrom that the Member States may
either provide that it is sufficient to exceed the limit of one only of the
three criteria for the exemption not to apply or adopt limits lower thanthose prescribed in the Directive;
Whereas consolidated accounts must give a true and fair view of the
assets and liabilities, the financial position and the profit and loss of all
the undertakings consolidated taken as a whole; whereas, therefore
consolidation should in principle include all of those undertakings;whereas such consolidation requires the full incorporation of the assets1983L0349 — EN — 01.01.1995 — 001.001 — 2
(1) OJ No C 121, 2. 6. 1976, p. 2.
(2) OJ No C 163, 10. 7. 1978, p. 60.
(3) OJ No C 75, 26. 3. 1977, p. 5.
(4) OJ No L 222, 14. 8. 1978, p. 11.
▼B
and liabilities and of the income and expenditure of those undertakings
and the separate disclosure of the interests of persons outwith suchbodies; whereas, however, the necessary corrections must be made to
eliminate the effects of the financial relations between the undertakings
consolidated;
Whereas a number of principles relating to the preparation of
consolidated accounts and valuation in the context of such accountsmust be laid down in order to ensure that items are disclosedconsistently, and may readily be compared not only as regards themethods used in their valuation but also as regards the periods covered
by the accounts;
Whereas participating interests in he capital of undertakings over which
undertakings included in a consolidation exercise significant influence
must be included in consolidated accounts by means of the equitymethod;
Whereas the notes on consolidated accounts must give details of the
undertakings to be consolidated;
Whereas certain derogations originally provided for on a transitional
basis in Directive 78/660/EEC may be continued subject to review at alater date,
HAS ADOPTED THIS DIRECTIVE:
SECTION 1
Conditionsforthepreparationofconsolidatedaccounts
Article 1
1. A Member State shall require any undertaking governed by its
national law to draw up consolidated accounts and a consolidated annualreport if that undertaking (a parent undertaking):
(a) has a majority of the shareholders' or members' voting rights in
another undertaking (a subsidiary undertaking); or
(b) has the right to appoint or remove a majority of the members of the
administrative, management or supervisory body of another under-taking (a subsidiary undertaking) and is at the same time ashareholder in or member of that undertaking; or
(c) has the right to exercise a dominant influence over an undertaking (a
subsidiary undertaking) of which it is a shareholder or member,
pursuant to a contract entered into with that undertaking or to aprovision in its memorandum or articles of association, where thelaw governing that subsidiary undertaking permits its being subjectto such contracts or provisions. A Member State need not prescribethat a parent undertaking must be a shareholder in or member of its
subsidiary undertaking. Those Member States the laws of which do
not provide for each contracts or clauses shall not be required toapply this provision; or
(d) is a shareholder in or member of an undertaking, and:
(aa) a majority of the members of the administrative, management
or supervisory bodies of that undertaking (a subsidiaryundertaking) who have held office during the financial year,
during the preceding financial year and up to the time when the
consolidated accounts are drawn up, have been appointedsolely as a result of the exercise of its voting rights; or
(bb) controls alone, pursuant to an agreement with other share-
holders in or members of that undertaking (a subsidiaryundertaking), a majority of shareholders' or members' voting
rights in that undertaking. The Member States may introduce
more detailed provisions concerning the form and contents ofsuch agreements.
The Member States shall prescribe at least the arrangements referred
to in (bb) above.1983L0349 — EN — 01.01.1995 — 001.001 — 3
▼B
They may make the application of (aa) above dependent upon the
holding's representing 20 % or more of the shareholders' ormembers' voting rights.
However, (aa) above shall not apply where another undertaking has
the rights referred to in subparagraphs (a), (b) or (c) above with
regard to that subsidiary undertaking.
2. Apart from the cases mentioned in paragraph 1 above and pending
subsequent coordination, the Member States may require any under-taking governed by their national law to draw up consolidated accountsand a consolidated annual report if that undertaking (a parentundertaking) holds a participating interest as defined in Article 17 of
Directive 78/660/EEC in another undertaking (a subsidiary undertaking),
and:
(a) it actually exercises a dominant influence over it; or
(b) it and the subsidiary undertaking are managed on a unified basis by
the parent undertaking.
Article 2
1. For the purposes of Article 1 (1) (a), (b) and (d), the voting rights
and the rights of appointment and removal of any other subsidiary
undertaking as well as those of any person acting in his own name but
on behalf of the parent undertaking or of another subsidiary undertakingmust be added to those of the parent undertaking.
2. For the purposes of Article 1 (1) (a), (b) and (d), the rights
mentioned in paragraph 1 above must be reduced by the rights:
(a) attaching to shares held on behalf of a person who is neither the
parent undertaking nor a subsidiary thereof; or
(b) attaching to shares held by way of security, provided that the rights
in question are exercised in accordance with the instructionsreceived, or held in connection with the granting of loans as partof normal business activities, provided that the voting rights areexercised in the interests of the person providing the security.
3. For the purposes of Article 1 (1) (a) and (d), the total of the
shareholders' or members' voting rights in the subsidiary undertakingmust be reduced by the voting rights attaching to the shares held by thatundertaking itself by a subsidiary undertaking of that undertaking or by aperson acting in his own name but on behalf of those undertakings.
Article 3
1. Without prejudice to Articles 13, 14 and 15, a parent undertaking
and all of its subsidiary undertakings shall be undertakings to beconsolidated regardless of where the registered offices of suchsubsidiary undertakings are situated.
2. For the purposes of paragraph 1 above any subsidiary undertaking
of a subsidiary undertaking shall be considered a subsidiary undertaking
of the parent undertaking which is the parent of the undertaking to beconsolidated.
Article 4
1. For the purposes of this Directive, a parent undertaking and all of
its subsidiary undertakings shall be undertakings to be consolidated
where either the parent undertaking or one or more subsidiary
undertakings is established as one of the following types of company:
(a)in Germany:
die Aktiengesellschaft, die Kommanditgesellschaft auf Aktien, die
Gesellschaft mit beschränkter Haftung;
(b)in Belgium:
la société anonyme / de naamloze vennootschap — la société en
commandite par actions / de commanditaire vennootschap op1983L0349 — EN — 01.01.1995 — 001.001 — 4
▼B
aandelen — la société de personnes à responsabilité limitée / de
personenvennootschap met beperkte aansprakelijkheid;
(c)in Denmark:
aktieselskaber, kommanditaktieselskaber, anpartsselskaber;
(d)in France:
la société anonyme, la société en commandite par actions, la société
à responsabilité limitée;
(e)in Greece:
η ανώνυµη εταιρία, η εταιρία περιορισµένης ευθύνης, η
ετερόρρυθµη κατά µετοχές εταιρία;
(f)in Ireland:
publicc ompanies limited by shares or by guarantee, private
companies limited by shares or by guarantee;
(g)in Italy:
la società per azioni, la società in accomandita per azioni, la società
a responsabilità limitata;
(h)in Luxembourg:
la société anonyme, la société en commandite par actions, la société
à responsabilité limitée;
(i)in the Netherlands:
de naamloze vennootschap, de besloten vennootschap met beperkte
aansprakelijkheid;
(j)in the United Kingdom:
publicc ompanies limited by shares or by guarantee, private
companies limited by shares or by guarantee;
k)in Spain:
la sociedad anónima, la sociedad comanditaria por acciones, la
sociedad de responsabilidad limitada;
l)in Portugal:
a sociedade anónima de responsabilidade limitada, a sociedade em
comandita por acções, a sociedade por quotas de responsabilidade
limitada;
m)in Austria:
die Aktiengesellschaft, die Gesellschaft mit beschränkter Haftung;
n)in Finland:
osakeyhtiö / aktiebolag;
o)in Sweden:
aktiebolag.
The first subparagraph shall also apply where either the parent
undertaking or one or more subsidiary undertakings is constituted asone of the types of company mentioned in Article 1 (1), second or thirdsubparagraph of Directive 78/660/EEC.
2. The Member States may, however, grant exemption from the
obligation imposed in Article 1 (1) where the parent undertaking is notconstituted as one of the types of company mentioned in Article 4 (1) ofthis Directive or in Article 1 (1), second or third subparagraph ofDirective 78/660/EEC.1983L0349 — EN — 01.01.1995 — 001.001 — 5
▼A1
▼A2
▼M3
▼B
Article 5
1. A Member State may grant exemption from the obligation imposed
in Article 1 (1) where the parent undertaking is a financial holding
company as defined in Article 5 (3) of Directive 78/660/EEC, and:
(a) it has not intervened during the financial year, directly or indirectly,
in the management of a subsidiary undertaking;
(b) it has not exercised the voting rights attaching to its participating
interest in respect of the appointment of a member of a subsidiary
undertaking's administrative, management or supervisory bodies
during the financial year or the five preceding financial years or,where the exercise of voting rights was necessary for the operationof the administrative, management or supervisory bodies of thesubsidiary undertaking, no shareholder in or member of the parent
undertaking with majority voting rights or member of the
administrative, management or supervisory bodies of that under-taking or of a member thereof with majority voting rights is amember of the administrative, management or supervisory bodies ofthe subsidiary undertaking and the members of those bodies soappointed have fulfilled their functions without any interference or
influence on the part of the parent undertaking or of any of its
subsidiary undertakings;
(c) it has made loans only to undertakings in which it holds participating
interests. Where such loans have been made to other parties, they
must have been repaid by the end of the previous financial year; and
(d) the exemption is granted by an administrative authority after
fulfilment of the above conditions has been checked.
2. (a) Where a financial holding company has been exempted, Article
43 (2) of Directive 78/660/EEC shall not apply to its annual
accounts with respect to any majority holdings in subsidiary
undertakings as from the date provided for in Article 49 (2).
(b) The disclosures in respect of such majority holdings provided for
in point 2 of Article 43 (1) of Directive 78/660/EEC may be
omitted when their nature is such that they would be seriously
prejudicial to the company, to its shareholders or members or toone of its subsidiaries. A Member State may make suchomissions subject to prior administrative or judicial authorization.Any such omission must be disclosed in the notes on the
accounts.
Article 6
1. Without prejudice to Articles 4 (2) and 5, a Member State may
provide for an exemption from the obligation imposed in Article 1 (1) ifas at the balance sheet date of a parent undertaking the undertakings tobe consolidated do not together, on the basis of their latest annualaccounts, exceed the limits of two of the three criteria laid down inArticle 27 of Directive 78/660/EEC.
2. A Member State may require or permit that the set-off referred to
in Article 19 (1) an the elimination referred to in Article 26 (1) (a) and
(b) be not effected when the aforementioned limits are calculated. In thatcase, the limits for the balance sheet total and net turnover criteria shallbe increased by 20 %.
3. Article 12 of Directive 78/660/EEC shall apply to the above
criteria.
4. This Article shall not apply where one of the undertakings to be
consolidated is a company the securities of which have been admitted toofficial listing on a stock exchange established in a Member State.
5. For 10 years after the date referred to in Article 49 (2), the Member
States may multiply the criteria expressed in ECU by up to 2,5 and mayincrease the average number of persons employed during the financialyear to a maximum of 500.1983L0349 — EN — 01.01.1995 — 001.001 — 6
▼B
Article 7
1. Notwithstanding Articles 4 (2), 5 and 6, a Member State shall
exempt from the obligation imposed in Article 1 (1) any parentundertaking governed by its national law which is also a subsidiary
undertaking if its own parent undertaking is governed by the law of a
Member State in the following two cases:
(a) where that parent undertaking holds all of the shares in the exempted
undertaking. The shares in that undertaking held by members of itsadministrative, management or supervisory bodies. pursuant to anobligation in law or in the memorandum or articles of associationshall be ignored for this purpose; or
(b) where that parent undertaking holds 90 % or more of the shares in
the exempted undertaking and the remaining shareholders in ormembers of that undertaking have approved the exemption.
In so far as the laws of a Member State prescribe consolidation in
this case at the time of the adoption of this Directive, that Member
State need not apply this provision for 10 years after the datereferred to in Article 49 (2).
2. Exemption shall be conditional upon compliance with all of the
following conditions:
(a) the exempted undertaking and, without prejudice to Articles 13, 14
and 15, all of its subsidiary undertakings must be consolidated in theaccounts of a larger body of undertakings, the parent undertaking ofwhich is governed by the law of a Member State;
(b) (aa) the consolidated accounts referred to in (a) above and the
consolidated annual report of the larger body of undertakingsmust be drawn up by the parent undertaking of that body andaudited, according to the law of the Member State by which the
parent undertaking of that larger body of undertakings is
governed, in accordance with this Directive;
(bb) the consolidated accounts referred to in (a) above and the
consolidated annual report referred to in (aa) above, the reportby the person responsible for auditing those accounts and,
where appropriate, the appendix referred to in Article 9 must be
published for the exempted undertaking in the mannerprescribed by the law of the Member State governing thatundertaking in accordance with Article 38. That Member Statemay require that those documents be published in its officiallanguage and that the translation be certified;
(c) the notes on the annual accounts of the exempted undertaking must
disclose:
(aa) the name and registered office of the parent undertaking that
draws up the consolidated accounts referred to in (a) above;and
(bb) the exemption from the obligation to draw up consolidated
accounts and a consolidated annual report.
3. A Member State need not, however, apply this Article to
companies the securities of which have been admitted to official listingon a stock exchange established in a Member State.
Article 8
1. In cases not covered by Article 7 (1), a Member State may, without
prejudice to Articles 4 (2), 5 and 6, exempt from the obligation imposedin Article 1 (1) any parent undertaking governed by its national lawwhich is also a subsidiary undertaking, the parent undertaking of whichis governed by the law of a Member State, provided that all the
conditions set out in Article 7 (2) are fulfilled and that the shareholders
in or members of the exempted undertaking who own a minimumproportion of the subscribed capital of that undertaking have notrequested the preparation of consolidated accounts at least six monthsbefore the end of the financial year. The Member States may fix thatproportion at not more than 10 % for publiclimited liability c ompanies1983L0349 — EN — 01.01.1995 — 001.001 — 7
▼B
and for limited partnerships with share capital, and at not more than 20 %
for undertakings of other types.
2. A Member State may not make it a condition for this exemption
that the parent undertaking which prepared the consolidated accounts
described in Article 7 (2) (a) must also be governed by its national law.
3. A Member State may not make exemption subject to conditions
concerning the preparation and auditing of the consolidated accountsreferred to in Article 7 (2) (a).
Article 9
1. A Member State may make the exemptions provided for in Articles
7 and 8 dependent upon the disclosure of additional information, inaccordance with this Directive, in the consolidated accounts referred toin Article 7 (2) (a), or in an appendix thereto, if that information isrequired of undertakings governed by the national law of that MemberState which are obliged to prepare consolidated accounts and are in the
same circumstances.
2. A Member State may also make exemption dependent upon the
disclosure, in the notes on the consolidated accounts referred to inArticle 7 (2) (a), or in the annual accounts of the exempted undertaking,of all or some of the following information regarding the body of
undertakings, the parent undertaking of which it is exempting from the
obligation to draw up consolidated accounts:
— the amount of the fixed assets,
— the net turnover,— the profit or loss for the financial year and the amount of the capital
and reserves,
— the average number of persons employed during the financial year.
Article 10
Articles 7 to 9 shall not affect any Member State's legislation on the
drawing up of consolidated accounts or consolidated annual reports in so
far as those documents are required:
— for the information of employees of their representatives, or
— by an administrative or judicial authority for its own purposes.
Article 11
1. Without prejudice to Articles 4 (2), 5 and 6, a Member State may
exempt from the obligation imposed in Article 1 (1) any parent
undertaking governed by its national law which is also a subsidiaryundertaking of a parent undertaking not governed by the law of aMember State, if all of the following conditions are fulfilled:
(a) the exempted undertaking and, without prejudice to Articles 13, 14
and 15, all of its subsidiary undertakings must be consolidated in the
accounts of a larger body of undertakings;
(b) the consolidated accounts referred to in (a) above and, where
appropriate, the consolidated annual report must be drawn up in
accordance with this Directive or in a manner equivalent to
consolidated accounts and consolidated annual reports drawn up inaccordance with this Directive;
(c) the consolidated accounts referred to in (a) above must have been
audited by one or more persons authorized to audit accounts underthe national law governing the undertaking which drew them up.
2. Articles 7 (2) (b) (bb) and (c) an 8 to 10 shall apply.3. A Member State may provide for exemptions under this Article
only if it provides for the same exemptions under Articles 7 to 10.1983L0349 — EN — 01.01.1995 — 001.001 — 8
▼B
Article 12
1. Without prejudice to Articles 1 to 10, a Member State may require
any undertaking governed by its national law to draw up consolidatedaccounts and a consolidated annual report if:
(a) that undertaking and one or more other undertakings with which it is
not connected, as described in Article 1 (1) or (2), are managed on a
unified basis pursuant to a contract concluded with that undertaking
or provisions in the memorandum or articles of association of thoseundertakings; or
(b) the administrative, management or supervisory bodies of that
undertaking and of one or more other undertakings with which itis not connected, as described in Article 1 (1) or (2), consist for themajor part of the same persons in office during the financial year
and until the consolidated accounts are drawn up.
2. Where paragraph 1 above is applied, undertakings related as
defined in that paragraph together with all of their subsidiaryundertakings shall be undertakings to be consolidated, as defined inthis Directive, where one or more of those undertakings is established as
one of the types of company listed in Article 4.
3. Articles 3, 4 (2), 5, 6, 13 to 28, 29 (1), (3), (4) and (5), 30 to 38 and
39 (2) shall apply to the consolidated accounts and the consolidatedannual report covered by this Article, references to parent undertakings
being understood to refer to all the undertakings specified in paragraph 1
above. Without prejudice to Article 19 (2), however, the items ‘capital’,‘share premium account’, ‘revaluation reserve’, ‘reserves’, ‘profit or lossbrought forward’, and ‘profit or loss for the financial year’ to beincluded in the consolidated accounts shall be the aggregate amounts
attributable to each of the undertakings specified in paragraph 1.
Article 13
1. An undertaking need not be included in consolidated accounts
where it is not material for the purposes of Article 16 (3).
2. Where two or more undertakings satisfy the requirements of
paragraph 1 above, they must nevertheless be included in consolidatedaccounts if, as a whole, they are material for the purposes of Article 16(3).
3. In addition, an undertaking need not be included in consolidated
accounts where:
(a) severe long-term restrictions substantially hinder:
(aa) the parent undertaking in the exercise of its rights over the
assets or management of that undertaking; or
(bb) the exercise of unified management of that undertaking where
it is in one of the relationships defined in Article 12 (1); or
(b) the information necessary for the preparation of consolidated
accounts in accordance with this Directive cannot be obtainedwithout disproportionate expense or undue delay; or
(c) the shares of that undertaking are held exclusively with a view to
their subsequent resale.
Article 14
1. Where the activities of one or more undertakings to be
consolidated are so different that their inclusion in the consolidatedaccounts would be incompatible with the obligation imposed in Article16 (3), such undertakings must, without prejudice to Article 33 of thisDirective, be excluded from the consolidation.
2. Paragraph 1 above shall not be applicable merely by virtue of the
fact that the undertakings to be consolidated are partly industrial, partlycommercial, and partly provide services, or because such undertakingscarry on industrial or commercial activities involving different productsor provide different services.1983L0349 — EN — 01.01.1995 — 001.001 — 9
▼B
3. Any application of paragraph 1 above and the reasons therefor
must be disclosed in the notes on the accounts. Where the annual orconsolidated accounts of the undertakings thus excluded from the
consolidation are not published in the same Member State in accordance
with Directive 68/151/EEC(
1), they must be attached to the consolidated
accounts or made available to the public. In the latter case it must bepossible to obtain a copy of such documents upon request. The price ofsuch a copy must not exceed its administrative cost.
Article 15
1. A Member State may, for the purposes of Article 16 (3), permit the
omission from consolidated accounts of any parent undertaking notcarrying on any industrial or commercial activity which holds shares in a
subsidiary undertaking on the basis of a joint arrangement with one or
more undertakings not included in the consolidated accounts.
2. The annual accounts of the parent undertaking shall be attached to
the consolidated accounts.
3. Where use is made of this derogation either Article 59 of Directive
78/660/EEC shall apply to the parent undertaking's annual accounts orthe information which would have resulted from its application must begiven in the notes on those accounts.
SECTION 2
Thepreparationofconsolidatedaccounts
Article 16
1. Consolidated accounts shall comprise the consolidated balance
sheet, the consolidated profit-and-loss account and the notes on theaccounts. These documents shall constitute a composite whole.
2. Consolidated accounts shall be drawn up clearly and in accordance
with this Directive.
3. Consolidated accounts shall give a true and fair view of the assets,
liabilities, financial position and profit or loss of the undertakings
included therein taken as a whole.
4. Where the application of the provisions of this Directive would not
be sufficient to give a true and fair view within the meaning ofparagraph 3 above, additional information must be given.
5. Where, in exceptional cases, the application of a provision of
Articles 17 to 35 and 39 is incompatible with the obligation imposed inparagraph 3 above, that provision must be departed from in order to givea true and fair view within the meaning of paragraph 3. Any such
departure must be disclosed in the notes on the accounts together with an
explanation of the reasons for it and a statement of its effect on theassets, liabilities, financial position and profit or loss. The MemberStates may define the exceptional cases in question and lay down therelevant special rules.
6. A Member State may require or permit the disclosure in the
consolidated accounts of other information as well as that which must bedisclosed in accordance with this Directive.
Article 17
1. Articles 3 to 10, 13 to 26 and 28 to 30 of Directive 78/660/EEC
shall apply in respect of the layout of consolidated accounts, withoutprejudice to the provisions of this Directive and taking account of theessential adjustments resulting from the particular characteristics ofconsolidated accounts as compared with annual accounts.1983L0349 — EN — 01.01.1995 — 001.001 — 10
(1) OJ No L 65, 14. 3. 1968, p. 8.
▼B
2. Where there are special circumstances which would entail undue
expense a Member State may permit stocks to be combined in theconsolidated accounts.
Article 18
The assets and liabilities of undertakings included in a consolidation
shall be incorporated in full in the consolidated balance sheet.
Article 19
1. The book values of shares in the capital of undertakings included
in a consolidation shall be set off against the proportion which theyrepresent of the capital and reserves of those undertakings:
(a) That set-off shall be effected on the basis of book values as at the
date as at which such undertakings are included in the consolidations
for the first time. Differences arising from such set-offs shall as faras possible be entered directly against those items in theconsolidated balance sheet which have values above or below theirbook values.
(b) A Member State may require or permit set-offs on the basis of the
values of identifiable assets and liabilities as at the date ofacquisition of the shares or, in the event of acquisition in two or
more stages, as at the date on which the undertaking became a
subsidiary.
(c) Any difference remaining after the application of (a) or resulting
from the application of (b) shall be shown as a separate item in theconsolidated balance sheet with an appropriate heading. That item,the methods used and any significant changes in relation to thepreceding financial year must be explained in the notes on theaccounts. Where the offsetting of positive and negative differences
is authorized by a Member State, a breakdown of such differences
must also be given in the notes on the accounts.
2. However, paragraph 1 above shall not apply to shares in the capital
of the parent undertaking held either by that undertaking itself or byanother undertaking included in the consolidation. In the consolidated
accounts such shares shall be treated as own shares in accordance with
Directive 78/660/EEC.
Article 20
1. A Member State may require or permit the book values of shares
held in the capital of an undertaking included in the consolidation to be
set off against the corresponding percentage of capital only, providedthat:
(a) the shares held represent at least 90 % of the nominal value or, in the
absence of a nominal value, of the accounting par value of the shares
of that undertaking other than shares of the kind described in Article
29 (2) (a) of Directive 77/91 EEC(
1);
(b) the proportion referred to in (a) above has been attained pursuant to
an arrangement providing for the issue of shares by an undertakingincluded in the consolidation; and
(c) the arrangement referred to in (b) above did not include a cash
payment exceeding 10 % of the nominal value or, in the absence ofnominal value, of the accounting par value of the shares issued.
2. Any difference arising under paragraph 1 above shall be added to
or deducted from consolidated reserves as appropriate.
3. The application of the method described in paragraph 1 above, the
resulting movement in reserves and the names and registered offices ofthe undertakings concerned shall be disclosed in the notes on theaccounts.1983L0349 — EN — 01.01.1995 — 001.001 — 11
(1) OJ No L 26, 31. 1. 1977, p. 1.
▼B
Article 21
The amount attributable to shares in subsidiary undertakings included in
the consolidation held by persons other than the undertakings includedin the consolidation shall be shown in the consolidated balance sheet as
a separate item with an appropriate heading.
Article 22
The income and expenditure of undertakings included in a consolidation
shall be incorporated in full in the consolidated profit-and-loss account.
Article 23
The amount of any profit or loss attributable to shares in subsidiary
undertakings included in the consolidation held by persons other thanthe undertakings included in the consolidation shall be shown in theconsolidated profit-and-loss account as a separate item with an
appropriate heading.
Article 24
Consolidated accounts shall be drawn up in accordance with the
principles enunciated in Articles 25 to 28.
Article 25
1. The methods of consolidation must be applied consistently from
one financial year to another.
2. Derogations from the provisions of paragraph 1 above shall be
permitted in exceptional cases. Any such derogations must be disclosedin the notes on the accounts and the reasons for them given together with
an assessment of their effect on the assets, liabilities, financial position
and profit or loss of the undertakings included in the consolidation takenas a whole.
Article 26
1. Consolidated accounts shall show the assets, liabilities, financial
positions and profits or losses of the undertakings included in aconsolidation as if the latter were a single undertaking. In particular:
(a) debts and claims between the undertakings included in a consolida-
tion shall be eliminated from the consolidated accounts;
(b) income and expenditure relating to transactions between the
undertakings included in a consolidation shall be eliminated from
the consolidated accounts;
(c) where profits and losses resulting from transactions between the
undertakings included in a consolidation are included in the bookvalues of assets, they shall be eliminated from the consolidatedaccounts. Pending subsequent coordination, however, a Member
State may allow the eliminations mentioned above to be effected in
proportion to the percentage of the capital held by the parentundertaking in each of the subsidiary undertakings included in theconsolidation.
2. A Member State may permit derogations from the provisions of
paragraph 1 (c) above where a transaction has been concluded accordingto normal market conditions and where the elimination of the profit orloss would entail undue expense. Any such derogations must be
disclosed and where the effect on the assets, liabilities, financial position
and profit or loss of the undertakings, included in the consolidation,taken as a whole, is material, that fact must be disclosed in the notes onthe consolidated accounts.
3. Derogations from the provisions of paragraph 1 (a), (b) or (c)
above shall be permitted where the amounts concerned are not materialfor the purposes of Article 16 (3).1983L0349 — EN — 01.01.1995 — 001.001 — 12
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Article 27
1. Consolidated accounts must be drawn up as at the same date as the
annual accounts of the parent undertaking.
2. A Member State may, however, require or permit consolidated
accounts to be drawn up as at another date in order to take account of the
balance sheet dates of the largest number or the most important of the
undertakings included in the consolidation. Where use is made of thisderogation that fact shall be disclosed in the note on the consolidatedaccounts together with the reasons therefor. In addition, account must betaken or disclosure made of important events concerning the assets and
liabilities, the financial position or the profit or loss of an undertaking
included in a consolidation which have occurred between that under-taking's balance sheet date and the consolidated balance sheet date.
3. Where an undertaking's balance sheet date precedes the consoli-
dated balance sheet date by more than three months, that undertakingshall be consolidated on the basis of interim accounts drawn up as at theconsolidated balance sheet date.
Article 28
If the composition of the undertakings included in a consolidation has
changed significantly in the course of a financial year, the consolidated
accounts must include information which makes the comparison of
successive sets of consolidated accounts meaningful. Where such achange is a major one, a Member State may require or permit thisobligation to be fulfilled by the preparation of an adjusted openingbalance sheet and an adjusted profit-and-loss account.
Article 29
1. Assets and liabilities to be included in consolidated accounts shall
be valued according to uniform methods and in accordance with Articles31 to 42 and 60 of Directive 78/660/EEC.
2. (a) An undertaking which draws up consolidated accounts must
apply the same methods of valuation as in its annual accounts.
However, a Member State may require or permit the use inconsolidated accounts of other methods of valuation inaccordance with the abovementioned Articles of Directive 78/660/EEC.
(b) Where use is made of this derogation that fact shall be disclosed
in the notes on the consolidated accounts and the reasons thereforgiven.
3. Where assets and liabilities to be included in consolidated accounts
have been valued by undertakings included in the consolidation bymethods differing from those used for the consolidation, they must berevalued in accordance with the methods used for the consolidation,
unless the results of such revaluation are not material for the purposes of
Article 16 (3). Departures from this principle shall be permitted inexceptional cases. Any such departures shall be disclosed in the notes onthe consolidated accounts and the reasons for them given.
4. Account shall be taken in the consolidated balance sheet and in the
consolidated profit-and-loss account of any difference arising on
consolidation between the tax chargeable for the financial year and for
preceding financial years and the amount of tax paid or payable inrespect of those years, provided that it is probable that an actual chargeto tax will arise within the foreseeable future for one of the undertakingsincluded in the consolidation.
5. Where assets to be included in consolidated accounts have been
the subject of exceptional value adjustments solely for tax purposes,
they shall be incorporated in the consolidated accounts only after those
adjustments have been eliminated. A Member State may, however,require or permit that such assets be incorporated in the consolidatedaccounts without the elimination of the adjustments, provided that theiramounts, together with the reasons for them, are disclosed in the noteson the consolidated accounts.1983L0349 — EN — 01.01.1995 — 001.001 — 13
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Article 30
1. A separate item as defined in Article 19 (1) (c) which corresponds
to a positive consolidation difference shall be dealt with in accordancewith the rules laid down in Directive 78/660/EEC for the item
‘goodwill’.
2. A Member State may permit a positive consolidation difference to
be immediately and clearly deducted from reserves.
Article 31
An amount shown as a separate item, as defined in Article 19 (1) (c),
which corresponds to a negative consolidation difference may betransferred to the consolidated profit-and-loss account only:
(a) where that difference corresponds to the expectation at the date of
acquisition of unfavourable future results in that undertaking, or to
the expectation of costs which that undertaking would incur, in sofar as such an expectation materializes; or
(b) in so far as such a difference corresponds to a realized gain.
Article 32
1. Where an undertaking included in a consolidation manages another
undertaking jointly with one or more undertakings not included in thatconsolidation, a Member State may require or permit the inclusion ofthat other undertaking in the consolidated accounts in proportion to therights in its capital held by the undertaking included in the consolidation.
2. Articles 13 to 31 shall apply mutatismutandis to the proportional
consolidation referred to in paragraph 1 above.
3. Where this Article is applied, Article 33 shall not apply if the
undertaking proportionally consolidated is an associated undertaking as
defined in Article 33.
Article 33
1. Where an undertaking included in a consolidation exercises a
significant influence over the operating and financial policy of an
undertaking not included in the consolidation (an associated under-
taking) in which it holds a participating interest, as defined in Article 17of Directive 78/660/EEC, that participating interest shall be shown in theconsolidated balance sheet as a separate item with an appropriateheading. An undertaking shall be presumed to exercise a significantinfluence over another undertaking where it has 20 % or more of the
shareholders' or members' voting rights in that undertaking. Article 2
shall apply.
2. When this Article is applied for the first time to a participating
interest covered by paragraph 1 above, that participating interest shall beshown in the consolidated balance sheet either:
(a) at its book value calculated in accordance with the valuation rules
laid down in Directive 78/660/EEC. The difference between thatvalue and the amount corresponding to the proportion of capital andreserves represented by that participating interest shall be disclosed
separately in the consolidated balance sheet or in the notes on the
accounts. That difference shall be calculated as at the date as atwhich that method is used for the first time; or
(b) at an amount corresponding to the proportion of the associated
undertaking's capital and reserves represented by that participating
interest. The difference between that amount and the book value
calculated in accordance with the valuation rules laid down inDirective 78/660/EEC shall be disclosed separately in the consoli-dated balance sheet or in the notes on the accounts. That differenceshall be calculated as at the date as at which that method is used forthe first time.1983L0349 — EN — 01.01.1995 — 001.001 — 14
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(c) A Member State may prescribe the application of one or other of (a)
and (b) above. The consolidated balance sheet or the notes on theaccounts must indicate whether (a) or (b) has been used.
(d) In addition, for the purposes of (a) and (b) above, a Member State
may require or permit the calculation of the difference as at the dateof acquisition of the shares or, where they were acquired in two ormore stages, as at the date on which the undertaking became an
associated undertaking.
3. Where an associated undertaking's assets or liabilities have been
valued by methods other than those used for consolidation in accordancewith Article 29 (2), they may, for the purpose of calculating thedifference referred to in paragraph 2 (a) or (b) above, be revalued by themethods used for consolidation. Where such revaluation has not been
carried out that fact must be disclosed in the notes on the accounts. A
Member State may require such revaluation.
4. The book value referred to in paragraph 2 (a) above, or the amount
corresponding to the proportion of the associated undertaking's capitaland reserves referred to in paragraph 2 (b) above, shall be increased orreduced by the amount of any variation which has taken place during thefinancial year in the proportion of the associated undertaking's capital
and reserves represented by that participating interest; it shall be reduced
by the amount of the dividends relating to that participating interest.
5. In so far as the positive difference referred to in paragraph 2 (a) or
(b) above cannot be related to any category of assets or liabilities it shallbe dealt with in accordance with Articles 30 and 39 (3).
6. The proportion of the profit or loss of the associated undertakings
attributable to such participating interests shall be shown in the
consolidated profit-and-loss account as a separate item under an
appropriate heading.
7. The eliminations referred to in Article 26 (1) (c) shall be effected
in so far as the facts are known or can be ascertained. Article 26 (2) and(3) shall apply.
8. Where an associated undertaking draws up consolidated accounts,
the foregoing provisions shall apply to the capital and reserves shown in
such consolidated accounts.
9. This Article need not be applied where the participating interest in
the capital of the associated undertaking is not material for the purposesof Article 16 (3).
Article 34
In addition to the information required under other provisions of this
Directive, the notes on the accounts must set out information in respectof the following matters at least:
1. The valuation methods applied to the various items in the
consolidated accounts, and the methods employed in calculating
the value adjustments. For items included in the consolidated
accounts which are or were originally expressed in foreign currencythe bases of conversion used to express them in the currency inwhich the consolidated accounts are drawn up must be disclosed.
2. (a) The names and registered offices of the undertakings included in
the consolidation; the proportion of the capital held in under-
takings included in the consolidation, other than the parentundertaking, by the undertakings included in the consolidationor by persons acting in their own names but on behalf of thoseundertakings; which of the conditions referred to in Articles 1
and 12 (1) following application of Article 2 has formed the
basis on which the consolidation has been carried out. The latterdisclosure may, however, be omitted where consolidation hasbeen carried out on the basis of Article 1 (1) (a) and where theproportion of the capital and the proportion of the voting rightsheld are the same.1983L0349 — EN — 01.01.1995 — 001.001 — 15
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(b) The same information must be given in respect of undertakings
excluded from a consolidation pursuant to Articles 13 and 14and, without prejudice to Article 14 (3), an explanation must be
given for the exclusion of the undertakings referred to in Article
13.
3 (a) The names and registered offices of undertakings associated
with an undertaking included in the consolidation as described
in Article 33 (1) and the proportion of their capital held by
undertakings included in the consolidation or by persons actingin their own names but on behalf of those undertakings.
(b) The same information must be given in respect of the associated
undertakings referred to in Article 33 (9), together with the
reasons for applying that provision.
4. The names and registered offices of undertakings proportionally
consolidated pursuant to Article 32, the factors on which joint
management is based, and the proportion of their capital held by the
undertakings included in the consolidation or by persons acting intheir own names but on behalf of those undertakings.
5. The name and registered office of each of the undertakings, other
than those referred to in paragraphs 2, 3 and 4 above, in which
undertakings included in the consolidation and those excludedpursuant to Article 14, either themselves or through persons actingin their own names but on behalf of those undertakings, hold at leasta percentage of the capital which the Member States cannot fix at
more than 20 %, showing the proportion of the capital held, the
amount of the capital and reserves, and the profit or loss for thelatest financial year of the undertaking concerned for whichaccounts have been adopted. This information may be omittedwhere, for the purposes of Article 16 (3), it is of negligibleimportance only. The information concerning capital and reserves
and the profit or loss may also be omitted where the undertaking
concerned does not publish its balance sheet and where less than50 % of its capital is held (directly or indirectly) by theabovementioned undertakings.
6. The total amount shown as owed in the consolidated balance sheet
and becoming due and payable after more than five years, as well asthe total amount shown as owed in the consolidated balance sheetand covered by valuable security furnished by undertakings includedin the consolidation, with an indication of the nature and form of the
security.
7. The total amount of any financial commitments that are not included
in the consolidated balance sheet, in so far as this information is ofassistance in assessing the financial position of the undertakings
included in the consolidation taken as a whole. Any commitments
concerning pensions and affiliated undertakings which are notincluded in the consolidation must be disclosed separately.
8. The consolidated net turnover as defined in Article 28 of Directive
78/660/EEC broken down by categories of activity and into
geographical markets in so far as, taking account of the manner inwhich the sale of products and the provision of services fallingwithin the ordinary activities of the undertakings included in theconsolidation taken as a whole are organized, these categories andmarkets differ substantially from one another.
9. a) The average number of persons employed during the financial
year by undertakings included in the consolidation broken downby categories and, if they are not disclosed separately in theconsolidated profit-and-loss account, the staff costs relating to
the financial year.
(b) The average number of persons employed during the financial
year by undertakings to which Article 32 has been applied shallbe disclosed separately.
10. The extent to which the calculation of the consolidated profit or loss
for the financial year has been affected by a valuation of the itemswhich, by way of derogation from the principles enunciated inArticles 31 and 34 to 42 of Directive 78/660/EEC and in Article 291983L0349 — EN — 01.01.1995 — 001.001 — 16
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(5) of this Directive, was made in the financial year in question or in
an earlier financial year with a view to obtaining tax relief. Wherethe influence of such a valuation on the future tax charges of the
undertakings included in the consolidation taken as a whole is
material, details must be disclosed.
11. The difference between the tax charged to the consolidated profit-
and-loss account for the financial year and to those for earlier
financial years and the amount of tax payable in respect of those
years, provided that this difference is material for the purposes offuture taxation. This amount may also be disclosed in the balancesheet as a cumulative amount under a separate item with anappropriate heading.
12. The amount of the emoluments granted in respect of the financial
year to the members of the administrative, managerial andsupervisory bodies of the parent undertaking by reason of theirresponsibilities in the parent undertaking and its subsidiary under-takings, and any commitments arising or entered into under thesame conditions in respect of retirement pensions for former
members of those bodies, with an indication of the total for each
category. A Member State may require that emoluments granted byreason of responsibilities assumed in undertakings linked asdescribed in Article 32 or 33 shall also be included with theinformation specified in the first sentence.
13. The amount of advances and credits granted to the members of the
administrative, managerial and supervisory bodies of the parentundertaking by that undertaking or by one of its subsidiaryundertakings, with indications of the interest rates, main conditionsand any amounts repaid, as well as commitments entered into on
their behalf by way of guarantee of any kind with an indication of
the total for each category. A Member State may require thatadvances and credits granted by undertakings linked as described inArticle 32 or 33 shall also be included with the informationspecified in the first sentence.
Article 35
1. A Member State may allow the disclosures prescribed in Article 34
(2), (3), (4) and (5):
(a) to take the form of a statement deposited in accordance with Article
3 (1) and (2) of Directive 68/151/EEC; this must be disclosed in thenotes on the accounts;
(b) to be omitted when their nature is such that they would be seriously
prejudicial to any of the undertakings affected by these provisions. AMember State may make such omissions subject to prior adminis-trative or judicial authorization. Any such omission must be
disclosed in the notes on the accounts.
2. Paragraph 1 (b) shall also apply to the information prescribed in
Article 34 (8).
SECTION 3
Theconsolidatedannualreport
Article 36
1. The consolidated annual report must include at least a fair review
of the development of business and the position of the undertakings
included in the consolidation taken as a whole.
2. In respect of those undertakings, the report shall also give an
indication of:
(a) any important events that have occurred since the end of the
financial year;
(b) the likely future development of those undertakings taken as a
whole;1983L0349 — EN — 01.01.1995 — 001.001 — 17
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(c) the activities of those undertakings taken as whole in the field of
research and development;
(d) the number and nominal value or, in the absence of a nominal value,
the accounting par value of all of the parent undertaking's sharesheld by that undertaking itself, by subsidiary undertakings of thatundertaking or by a person acting in his own name but on behalf ofthose undertakings. A Member State may require or permit the
disclosure of these particulars in the notes on the accounts.
SECTION 4
Theauditingofconsolidatedaccounts
Article 37
1. An undertaking which draws up consolidated accounts must have
them audited by one or more persons authorized to audit accounts under
the law of the Member State which govern that undertaking.
2. The person or persons responsible for auditing the consolidated
accounts must also verify that the consolidated annual report is
consistent with the consolidated accounts for the same financial year.
SECTION 5
Thepublicationofconsolidatedaccounts
Article 38
1. Consolidated accounts, duly approved, and the consolidated annual
report, together with the opinion submitted by the person responsible for
auditing the consolidated accounts, shall be published for the under-taking which drew up the consolidated accounts as laid down by thelaws of the Member State which govern it in accordance with Article 3of Directive 68/151/EEC.
2. The second subparagraph of Article 47 (1) of Directive 78/660/
EEC shall apply with respect to the consolidated annual report.
3. The following shall be substituted for the second subparagraph of
Article 47 (1) of Directive 78/660/EEC: ‘It must be possible to obtain a
copy of all or part of any such report upon request. The price of such a
copy must not exceed its administrative cost.’
4. However, where the undertaking which drew up the consolidated
accounts is not established as one of the types of company listed inArticle 4 and is not required by its national law to publish the documentsreferred to in paragraph 1 in the same manner as prescribed in Article 3of Directive 68/151/EEC, it must at least make them available to the
public at its head office. It must be possible to obtain a copy of such
documents upon request. The price of such a copy must not exceed itsadministrative cost.
5. Articles 48 and 49 of Directive 78/660/EEC shall apply.6. The Member States shall provide for appropriate sanctions for
failure to comply with the publication obligations imposed in thisArticle.
Article 38a
Consolidated accounts may be published in the currency in which they
were drawn up and in ecus, translated at the exchange rate prevailing onthe consolidated balance sheet date. That rate shall be disclosed in thenotes on the accounts.1983L0349 — EN — 01.01.1995 — 001.001 — 18
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SECTION 6
Transitionalandfinalprovisions
Article 39
1. When, for the first time, consolidated accounts are drawn up in
accordance with this Directive for a body of undertakings which wasalready connected, as described in Article 1 (1), before application of theprovisions referred to in Article 49 (1), a Member State may require or
permit that, for the purposes of Article 19 (1) account be taken of the
book value of a holding and the proportion of the capital and reservesthat it represents as at a date before or the same as that of the firstconsolidation.
2. Paragraph 1 above shall apply mutatismutandis to the valuation
for the purposes of Article 33 (2) of a holding, or of the proportion ofcapital and reserves that it represents, in the capital of an undertaking
associated with an undertaking included in the consolidation, and to the
proportional consolidation referred to in Article 32.
3. Where the separate item defined in Article 19 (1) corresponds to a
positive consolidation difference which arose before the date of the firstconsolidated accounts drawn up in accordance with this Directive, aMember State may:
(a) for the purposes of Article 30 (1), permit the calculation of the
limited period of more than five years provided for in Article 37 (2)
of Directive 78/660/EEC as from the date of the first consolidated
accounts drawn up in accordance with this Directive; and
(b) for the purposes of Article 30 (2), permit the deduction to be made
from reserves as at the date of the first consolidated accounts drawn
up in accordance with this Directive.
Article 40
1. Until expiry of the deadline imposed for the application in national
law of the Directives supplementing Directive 78/660/EEC as regards
the harmonization of the rules governing the annual accounts of banksand other financial institutions and insurance undertakings, a MemberState may derogate from the provisions of this Directive concerning thelayout of consolidated accounts, the methods of valuing the itemsincluded in those accounts and the information to be given in the notes
on the accounts:
(a) with regard to any undertaking to be consolidated which is a bank,
another financial institution or an insurance undertaking;
(b) where the undertakings to be consolidated comprise principally
banks, financial institutions or insurance undertakings.
They may also derogate from Article 6, but only in so far as the limits
and criteria to be applied to the above undertakings are concerned.
2. In so far as a Member State has not required all undertakings
which are banks, other financial institutions or insurance undertakings todraw up consolidated accounts before implementation of the provisionsreferred to in Article 49 (1), it may, until its national law implementsone of the Directives mentioned in paragraph 1 above, but not in respectof financial years ending after 1993:
(a) suspend the application of the obligation imposed in Article 1 (1)
with respect to any of the above undertakings which is a parent
undertaking. That fact must be disclosed in the annual accounts ofthe parent undertaking and the information prescribed in point 2 ofArticle 43 (1) of Directive 78/660/EEC must be given for allsubsidiary undertakings;
(b) where consolidated accounts are drawn up and without prejudice to
Article 33, permit the omission from the consolidation of any of theabove undertakings which is a subsidiary undertaking. Theinformation prescribed in Article 34 (2) must be given in the noteson the accounts in respect of any such subsidiary undertaking.1983L0349 — EN — 01.01.1995 — 001.001 — 19
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3. In the cases referred to in paragraph 2 (b) above, the annual or
consolidated accounts of the subsidiary undertaking must, in so far astheir publication is compulsory, be attached to the consolidated accounts
or, in the absence of consolidated accounts, to the annual accounts of the
parent undertaking or be made available to the public. In the latter caseit must be possible to obtain a copy of such documents upon request.The price of such a copy must not exceed its administrative cost.
Article 41
1. Undertakings which are connected as described in Article 1 (1) (a),
(b) and (d) (bb), and those other undertakings which are similarlyconnected with one of the aforementioned undertakings, shall beaffiliated undertakings for the purposes of this Directive and of Directive78/660/EEC.
2. Where a Member State prescribes the preparation of consolidated
accounts pursuant to Article 1 (1) (c), (d) (aa) or (2) or Article 12 (1), the
undertakings which are connected as described in those Articles and
those other undertakings which are connected similarly, or are connectedas described in paragraph 1 above to one of the aforementionedundertakings, shall be affiliated undertakings as defined in paragraph 1.
3. Even where a Member State does not prescribe the preparation of
consolidated accounts pursuant to Article 1 (1) (c), (d) (aa) or (2) orArticle 12 (1), it may apply paragraph 2 of this Article.
4. Articles 2 and 3 (2) shall apply.5. When a Member State applies Article 4 (2), it may exclude from
the application of paragraph 1 above affiliated undertakings which areparent undertakings and which by virtue of their legal form are not
required by that Member State to draw up consolidated accounts in
accordance with the provisions of this Directive as well as parentundertakings with a similar legal form.
Article 42
The following shall be substituted for Article 56 of Directive 78/660/
EEC:
‘Article 56
1. The obligation to show in annual accounts the items prescribed
by Articles 9, 10 and 23 to 26 which relate to affiliated undertakings,as defined by Article 41 of Directive 83/349/EEC, and the obligationto provide information concerning these undertakings in accordancewith Articles 13 (2), and 14 and point 7 of Article 43 (1) shall enter
into force on the date fixed in Article 49 (2) of that Directive.
2. The notes on the accounts must also disclose:
(a) the name and registered office of the undertaking which draws
up the consolidated accounts of the largest body of undertakingsof which the company forms part as a subsidiary undertaking;
(b) the name and registered office of the undertaking which draws
up the consolidated accounts of the smallest body of under-
takings of which the company forms part as a subsidiary
undertaking and which is also included in the body ofundertakings referred to in (a) above;
(c) the place where copies of the consolidated accounts referred to
in (a) and (b) above may be obtained provided that they are
available.’
Article 43
The following shall be substituted for Article 57 of Directive 78/660/
EEC:
‘Article 57
Notwithstanding the provisions of Directives 68/151/EEC and 77/91/
EEC, a Member State need not apply the provisions of this Directive1983L0349 — EN — 01.01.1995 — 001.001 — 20
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concerning the content, auditing and publication of annual accounts
to companies governed by their national laws which are subsidiaryundertakings, as defined in Directive 83/349/EEC, where the
following conditions are fulfilled:
(a) the parent undertaking must be subject to the laws of a Member
State;
(b) all shareholders or members of the subsidiary undertaking must
have declared their agreement to the exemption from suchobligation; this declaration must be made in respect of everyfinancial year;
(c) the parent undertaking must have declared that it guarantees the
commitments entered into by the subsidiary undertaking;
(d) the declarations referred to in (b) and (c) must be published by
the subsidiary undertaking as laid down by the laws of theMember State in accordance with Article 3 of Directive 68/151/EEC;
(e) the subsidiary undertaking must be included in the consolidated
accounts drawn up by the parent undertaking in accordance with
Directive 83/349/EEC;
(f) the above exemption must be disclosed in the notes on the
consolidated accounts drawn up by the parent undertaking;
(g) the consolidated accounts referred to in (e), the consolidated
annual report, and the report by the person responsible forauditing those accounts must be published for the subsidiary
undertaking as laid down by the laws of the Member State in
accordance with Article 3 of Directive 68/151/EEC.’
Article 44
The following shall be substituted for Article 58 of Directive 78/660/
EEC:
‘Article 58
A Member State need not apply the provisions of this Directive
concerning the auditing and publication of the profit-and-loss
account to companies governed by their national laws which areparent undertakings for the purposes of Directive 83/349/EEC wherethe following conditions are fulfilled:
(a) the parent undertaking must draw up consolidated accounts in
accordance with Directive 83/349/EEC and be included in the
consolidated accounts;
(b) the above exemption must be disclosed in the notes on the
annual accounts of the parent undertaking;
(c) the above exemption must be disclosed in the notes on the
consolidated accounts drawn up by the parent undertaking;
(d) the profit or loss of the parent company, determined in
accordance with this Directive, must be shown in the balance
sheet of the parent company.’
Article 45
The following shall be substituted for Article 59 of Directive 78/660/
EEC:
‘Article 59
1. A Member State may require or permit that participating
interests, as defined in Article 17, in the capital of undertakings over
the operating and financial policies of which significant influence is
exercised, be shown in the balance sheet in accordance withparagraphs 2 to 9 below, as sub-items of the items “shares inaffiliated undertakings” or “participating interests”, as the case maybe. An undertaking shall be presumed to exercise a significantinfluence over another undertaking where it has 20 % or more of the1983L0349 — EN — 01.01.1995 — 001.001 — 21
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shareholders' or members' voting rights in that undertaking. Article 2
of Directive 83/349/EEC shall apply.
2. When this Article is first applied to a participating interest
covered by paragraph 1, it shall be shown in the balance sheet either:
(a) at its book value calculated in accordance with Articles 31 to 42.
The difference between that value and the amount correspondingto the proportion of capital and reserves represented by the
participating interest shall be disclosed separately in the balance
sheet or in the notes on the accounts. That difference shall becalculated as at the date as at which the method is applied for thefirst time; or
(b) at the amount corresponding to the proportion of the capital and
reserves represented by the participating interest. The differencebetween that amount and the book value calculated in
accordance with Articles 31 to 42 shall be disclosed separately
in the balance sheet or in the notes on the accounts. Thatdifference shall be calculated as at the date as at which themethod is applied for the first time.
(c) A Member State may prescribe the application of one or other of
the above paragraphs. The balance sheet or the notes on theaccount must indicate whether (a) or (b) above has been used.
(d) In addition, when applying (a) and (b) above, a Member State
may require or permit calculation of the difference as at the date
of acquisition of the participating interest referred to inparagraph 1 or, where the acquisition took place in two ormore stages, as at the date as at which the holding became aparticipating interest within the meaning of paragraph 1 above.
3. Where the assets or liabilities of an undertaking in which a
participating interest within the meaning of paragraph 1 above is
held have been valued by methods other than those used by the
company drawing up the annual accounts, they may, for the purposeof calculating the difference referred to in paragraph 2 (a) or (b)above, be revalued by the methods used by the company drawing upthe annual accounts. Disclosure must be made in the notes on the
accounts where such revaluation has not been carried out. A Member
State may require such revaluation.
4. The book value referred to in paragraph 2 (a) above, or the
amount corresponding to the proportion of capital and reservesreferred to in paragraph 2 (b) above, shall be increased or reduced bythe amount of the variation which has taken place during thefinancial year in the proportion of capital and reserves represented
by that participating interest; it shall be reduced by the amount of the
dividends relating to the participating interest.
5. In so far as a positive difference covered by paragraph 2 (a) or
(b) above cannot be related to any category of asset or liability, itshall be dealt with in accordance with the rules applicable to theitem “goodwill”.
6. (a) The proportion of the profit or loss attributable to
participating interests within the meaning of paragraph 1
above shall be shown in the profit-and-loss account as a
separate item with an appropriate heading.
(b) Where that amount exceeds the amount of dividends already
received or the payment of which can be claimed, the amountof the difference must be placed in a reserve which cannot bedistributed to shareholders.
(c) A Member State may require or permit that the proportion of
the profit or loss attributable to the participating interests
referred to in paragraph 1 above be shown in the profit-and-
loss account only to the extent of the amount correspondingto dividends already received or the payment of which can beclaimed.
7. The eliminations referred to in Article 26 (1) (c) of Directive
83/349/EEC shall be effected in so far as the facts are known or canbe ascertained. Article 26 (2) and (3) of that Directive shall apply.1983L0349 — EN — 01.01.1995 — 001.001 — 22
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8. Where an undertaking in which a participating interest within
the meaning of paragraph 1 above is held draws up consolidatedaccounts, the foregoing paragraphs shall apply to the capital and
reserves shown in such consolidated accounts.
9. This Article need not be applied where a participating interest
as defined in paragraph 1 is not material for the purposes of Article 2(3).’
Article 46
The following shall be substituted for Article 61 of Directive 78/660/
EEC:
‘Article 61
A Member State need not apply the provisions of point 2 of Article
43 (1) of this Directive concerning the amount of capital andreserves and profits and losses of the undertakings concerned tocompanies governed by their national laws which are parent
undertakings for the purposes of Directive 83/349/EEC:
(a) where the undertakings concerned are included in consolidated
accounts drawn up by that parent undertaking, or in the
consolidated accounts of a larger body of undertakings as
referred to in Article 7 (2) of Directive 83/349/EEC; or
(b) where the holdings in the undertakings concerned have been
dealt with by the parent undertaking in its annual accounts inaccordance with Article 59, or in the consolidated accounts
drawn up by that parent undertaking in accordance with Article
33 of Directive 83/349/EEC.’
Article 47
The Contact Committee set up pursuant to Article 52 of Directive 78/
660/EEC shall also:
(a) facilitate, without prejudice to Articles 169 and 170 of the Treaty,
harmonized application of this Directive through regular meetingsdealing, in particular, with practical problems arising in connection
with its application;
(b) advise the Commission, if necessary, on additions or amendments to
this Directive.
Article 49
1. The Member States shall bring into force the laws, regulations and
administrative provisions necessary for them to comply with this
Directive before 1 January 1988. They shall forthwith inform the
Commission thereof.
2. A Member State may provide that the provisions referred to in
paragraph 1 above shall first apply to consolidated accounts for financialyears beginning on 1 January 1990 or during the calendar year 1990.
3. The Member States shall ensure that they communicate to the
Commission the texts of the main provisions of national law which theyadopt in the field covered by this Directive.
Article 50
1. Five years after the date referred to in Article 49 (2), the Council,
acting on a proposal from the Commission, shall examine and if need berevise Articles 1 (1) (d) (second subparagraph), 4 (2), 5, 6, 7 (1), 12, 43and 44 in the light of the experience acquired in applying this Directive,the aims of this Directive and the economic and monetary situation atthe time.1983L0349 — EN — 01.01.1995 — 001.001 — 23
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2. Paragraph 1 above shall not affect Article 53 (2) of Directive 78/
660/EEC.
Article 51
This Directive is addressed to the Member States.1983L0349 — EN — 01.01.1995 — 001.001 — 24