No C 180/34 Official  Journal  of the European  Communities 28.7.77 
Reasons 
No reasons  given. 
Voting 
For: 10, against:  40, abstentions:  16. 
Opinion  on the  proposal  for  a Council  Regulation  on the  necessary  measures  to 
achieve  comparability  between  the accounting  systems  and  annual  accounts  of railway 
undertakings 
The text  referred  to the  Committee  has  been  published  in Official  Journal  of the 
European  Communities  No  C 91 of 15 April  1977,  page  1. 
A. LEGAL  BASIS  FOR  THE  OPINION 
On 31 March  1977,  the Council  referred  the abovementioned  proposal  to the Economic 
and Social  Committee  in accordance  with  Article  75 of the  Treaty  establishing  the 
European  Economic  Community. 
B. OPINION  OF  THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
The Economic  and  Social  Committee  prepared  its opinion  on the above  matter  at its 
150th  plenary  session,  held  in Brussels  on 22 and 23 June  1977. 
The full  text  of the opinion  is as follows: 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE, 
Having  regard  to  the  Treaty  establishing  the 
European  Economic  Community,  and  in particular 
Article  75 thereof, 
Having  regard  to the  request  for an opinion  made 
by the  Council  of the  European  Communities  on 
31 March  1977, 
Having  regard  to the  Council  Decision  of 20 May 
1975  on the improvement  of the situation  of railway 
undertakings  and  the  harmonization  of the  rules 
governing  financial  relations  between  such  under-
takings  and  States,  and  in particular,  Article  8 (2) 
thereof  (*), 
Having  regard  to the Committee's  opinion  of 29 June 
1972  on this  matter  (2), 
Having  regard  to the  decision  taken  by its Bureau 
on 29  March  1977,  instructing  the  Section  for 
Transport  and  Communications  to draw  up  an 
opinion  and  a report  on the new  proposal, 
Having  regard  to the opinion  issued  by the Section 
for Transport  and  Communications  at its 113th 
meeting  held  in Turin  on 1 June  1977, 
(!) OJ  No L 152,  12. 6. 1975,  p. 3 et seq. 
(') OJ  No C 89, 29. 8. 1972,  p. 1 et seq. Having  regard  to the  oral  report  made  by the 
rapporteur,  Mr  Fredersdorf  (Article  29  of the 
Committee's  Rules  of Procedure), 
Having  regard  to the discussions  at its 150th  plenary 
session  held  on 22 and  23 June  1977  (meeting  of 
22 June  1977), 
Whereas  the coordination  of national  railway  policies 
in the  Community  —  if only  because  of the 
importance  of the railway  for transport  — is a major 
concern  of the common  transport  policy; 
Whereas  the comparability  of railway  undertakings' 
annual  accounts  can  make  a contribution  in this 
direction; 
Whereas  such  comparability  also  constitutes  an 
important  step  towards  the possible  future  integration 
of the Community's  railways, 
HAS  UNANIMOUSLY  ADOPTED  THE  FOLLOWING 
OPINION: 
The Committee  gives  its approval  to the  Commis-
sion's  proposal,  subject  to the  comments  set  out 
below. 
28. 7. 77 Official  Journal  of the European  Communities No C 180/35 
1. General  comments 
1.1. The  Commission's  proposal  is based  on 
Article  8 (2) of the aforementioned  Council  Decision 
of 20 May  1975,  which  specifies  that  the accounting 
systems  and  annual  accounts  of the  Community's 
railways  should  be made  comparable,  using  the 
financial  and accounting  rules  applicable  in industry 
and trade.  The  Committee  considers  this provision  to 
be a suitable  basis  for attaining  the objectives  set 
out in the  aforementioned  Decision  (adequate 
autonomy,  profitability  and  disclosure  of State 
subsidies). 
1.2. Article  8 (2) of the aforementioned  Decision 
stipulates  that  the  steps  necessary  to make  the 
accounting  systems  and  annual  accounts  of the 
Community's  railways  comparable  are to be taken 
by 1 January  1978.  In the Commission's  proposal  it 
is stated  that,  as a transitional  measure,  the railways 
will be allowed  to continue  until  the end  of 1984 
with the methods  used  at present  for the presentation 
of their  accounts.  Thereafter,  however,  accounting 
systems  and  annual  accounts  are  to be not  only 
comparable  but also  standardized. 
There  is no basic  objection,  the Committee  feels, 
to the Commission's  proposal.  When  compared  with 
the majority  of the accounting  schemes  currently  used 
by the  railways  in the  Community,  however,  the 
scheme  set out in the proposal's  annexes  (which  is 
to be the only  valid  scheme  starting  from  the 1985 
financial  year)  goes  too  far  in running  together 
individual  items.  Therefore,  if accounts  were  based 
solely  on the proposed  accounting  scheme,  they  would 
in principle  disclose  less  information  and  present  a 
less clear  picture.  This  would  rightly  trigger  off 
public  criticism. 
On the other  hand,  a more  detailed  itemization  on 
the basis  of the accounting  scheme  put forward  by 
the Commission  is not possible  for the time  being, 
because  the  disparities  between  the  railways  with 
regard  to organization  of operations,  subsidiary 
book-keeping,  data-processing  systems  and  valuation 
principles  are still too great. 
The Committee  therefore  proposes  that  Articles  3, 
4, 6, 7 and  8 be amended  so that  the  railways' 
annual  accounts  continue  to be  presented  for 
publication  in  their  present  form  and  their 
transposition  in accordance  with  the  Community 
accounting  scheme  set out  in Annexes  I to IV is 
merely  an additional  proviso. 
2. Specific  comments 
2.1. Article  4 
The Committee  thinks  that  this  Article  is not clearly 
worded.  It is not  specified  whether  the transposed 
Done  at Brussels,  22 June  1977. balance  sheet  and  the  transposed  profit  and  loss 
account  are  to contain  only  the  items  listed  in 
Annexes  I and  III  or the  more  detailed  data 
prescribed  in Annexes  II and IV. 
2.2. Article  5 
It is not 100  % certain  what  is meant  by 'work  in 
progress'.  It must  be clearly  stated  here  whether  this 
is meant  to cover  deferred  items. 
The phrase  'explanatory  notes  concerning  any  item' 
is open  to interpretation.  However,  it should  simply 
be required  that  the  valuation  principles  (e.g., 
depreciation  based  on  replacement  value  or on 
original  value  or provisions  for replacement  instead 
of depreciation)  are explained  in brief. 
2.3. Annexes  III and IV 
2.3.1.  A  distinction  is to be made  in goods  traffic 
revenue  between  domestic  and  international  freight. 
This  goes  beyond  the Council's  instructions.  Such  a 
distinction  cannot  always  be drawn,  even  though 
data processing  makes  it possible  to some  extent  to 
calculate  the  revenue  from  international  freight 
shipments  dispatched  as through  consignments. 
The revenue  earned  from  shipments  dispatched  in 
stages  (e.g.,  use  of 'consignor'  railways'  domestic 
tariff  as far as the  border  and  of the  'consignee' 
railways'  domestic  tariff  from  the border  onwards) 
and even  more  so from  shipments  which  are 
re-dispatched  at the border  (both  of which  undoubt-
edly fall  into  the  international  freight  category) 
cannot  be unequivocally  allocated  to the domestic  or 
international  side  of operations.  If the Commission's 
proposal  were  accepted  and a distinction  were  insisted 
upon,  it would  be necessary  to resort  to estimates. 
2.3.2.  On  most  of the Community's  railways  it is 
also not possible  to distinguish  in the costs  column 
between  transport  and  ancillary  activities  and  other 
activities  when  financiail  accounting  methods  are used. 
Such  a distinction  could  be drawn  only  by employing 
cost accounting.  Example:  the personnel  costs  for an 
employee  who  works  partly  in the transport  sector 
and partly  elsewhere  can only  be apportioned  to the 
various  categories  of costs  by using  cost-accounting 
methods.  It is therefore  suggested  that  this  distinction 
between  different  activities  be dropped  in this 
instance  where  only  financial  accounting  is involved. 
The Chairman 
of the Economic  and  Social  Committee 
Basil de FERRANTI