Proposal for a Directive of the European Parliament and of the Council amending Council Directives 78/660/EEC and 83/349/EEC as regards certain disclosure requirements for medium-sized companies and obligation to draw up consolidated accounts {SEC(2008) 466} {SEC(2008) 467}
Date: 2008-04-17
Institutions: European Commission
Subjects: company law, consolidated account, publication of accounts, small and medium-sized enterprises

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 17.4.2008 
COM(2008) 195 final 

2008/0084 (COD) 

Proposal for a 

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL  

amending Council Directives 78/660/EEC and 83/349/EEC as regards certain disclosure 
requirements for medium-sized companies and obligation to draw up consolidated 
accounts  

(presented by the Commission) 

{SEC(2008) 466} 
{SEC(2008) 467} 

EN 

   EN 

 
 
 
  
EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

1.1. 

Objectives of the proposal 

The  objective  of  the  amendment  to  the  Directive  78/660/EEC  (4th  Company  Law 
Directive)1 is to simplify financial reporting for small and medium-sized companies 
(SMEs)2  and  relieve  SMEs  from  financial  reporting  burden  in  a  short  term 
perspective. The changes should lead to reduced administrative burden without loss 
of relevant information. 

The  objective  of  the  amendment  to  the  Directive  83/349/EEC  (7th  Company  Law 
Directive)3 is to clarify the interaction between consolidation rules in this Directive 
and in the International Financial Reporting Standards. 

1.2. 

General context 

The  European  Council  of  8-9  March  2007  underlined  that  reducing  administrative 
burden is important for boosting the European economy, especially considering the 
potential benefits this can bring for SMEs. It stressed that a strong joint effort of the 
European Union and the Member States is necessary to reduce administrative burden 
within  the  EU4.  At  its  meeting  in  March  2008,  the  European  Council  called  on  the 
Commission  to  identify  new  "fast  track"  legislative  proposals  in  order  to  reduce 
administrative burdens5. Accounting and auditing have been identified as key areas 
for  reducing  administrative  burden  for  European  companies6.  The  Accounting 
Directives are in this context understood as Directives 78/660/EEC and 83/349/EEC. 

The  proposed  amendment  forms  part  of  the  second  fast  track  package  for  the 
reduction of administrative burden7 which includes legislative measures in the areas 
of  company  law,  accounting  and  auditing  aiming  at  simplifying  the  business 
environment for European companies; it represents targeted and limited changes that 
should lead to simplification in the short term perspective. Small and medium-sized 
companies are often subject to the same rules as larger companies, but their specific 
accounting  needs  have  rarely  been  assessed  and  extensive  reporting  rules  create  a 
cost burden and can hinder efficient use of capital for productive purposes.  

1 

2 

3 

4 
5 
6 

7 

OJ  L  222,  14.8.1978,  p.  11.  Directive  as  last  amended  by  Directive  2006/46/EC  of  the  European 
Parliament and of the Council (OJ L 224, 16.8.2006, p. 1). 
Definitions  in  Article  11  (small  companies)  and  Article  27  (medium-sized  companies)  of  the  4th 
Company Law Directive. 
OJ  L  193,  18.7.1983,  p.  1,  Directive  as  last  amended  by  Council  Directive  2006/99/EC  (OJ  L  363, 
20.12.2006, p. 137). 
Presidency Conclusions of the Brussels European Council - doc. 7224/07, Conclusion 1. 
Presidency Conclusions of the Brussels European Council – doc. 7652/08, Conclusion 1. 
EU Project on baseline measurement and reduction of administrative costs, Second interim report, 15 
January 2008, page 37. Final report will be published on the Commission website. 
See  Commission  working  document  "Reducing  administrative  burdens  in  the  European  Union  2007 
progress report and 2008 outlook" - SEC(2008) 35. 

EN 

2 

   EN 

 
                                                 
The 4th Company Law Directive was adopted in 1978 in order to create a harmonised 
set of requirements for the external reporting of all limited liability companies in the 
EU. In 1983, the 7th Company Law Directive was adopted and added a common set 
of  requirements  for  consolidated  financial  statements.  During  the  past  25  years  the 
Accounting  Directives  have  been  modified  several  times.  Through  the  adoption  of 
the  Regulation  (EC)  No  1606/2002  on  the  application  of  international  accounting 
standards  (IAS  Regulation)8  listed  companies  (and  those  with  listed  debt)  have  to 
present IFRS accounts, and are consequently relieved from most of the requirements 
in the 4th and 7th Directives. These Directives however still form the basis for SME 
accounting in the EU. 

The  application  of  the  IAS  Regulation  has  also  highlighted  the  borderline  between 
the Directives and IFRS. Directive 83/349/EEC requires a parent company to prepare 
consolidated accounts even if the only subsidiary or all of the subsidiaries as a whole 
are  not  material.  As  a  consequence  these  companies  are  scoped  in  the  IAS 
Regulation  and  therefore  have  to  prepare  their  consolidated  financial  statements  in 
accordance  with  IFRS.  This  consequence  of  the  particular  Article  in  Directive 
83/349/EEC  is  considered  to  be  excessive  where  a  parent  company  has  only 
immaterial subsidiaries. Such cases should be looked into and efficient solutions be 
found. 

Also the European Parliament encourages “the Commission to continue its activities 
with  regard  to  the  simplification  of  company  law,  accounting  and  auditing…,  in 
particular the 4th and 7th Company Law Directives”9. 

2. 

RESULTS OF CONSULTATIONS OF INTERESTED PARTIES AND IMPACT ASSESSMENT 

2.1. 

Consultation of interested parties 

2.1.1.  The simplification proposals concerning the 4th Company Law Directive 

The  Commission  Services  conducted  research  in  order  to  identify  the  potentially 
most  burdensome  requirements  of  the  Accounting  Directives10.  The  initial  findings 
indicated that several amendments could be made in order to simplify them. 

These  initial  ideas  and  suggestions  were  discussed  with  Member  States  in  the 
Accounting Regulatory Committee (ARC) at several meetings from December 2006 
onwards. Following these discussions, the Commission published a Communication 

8 

9 

10 

Regulation (EC) No 1606/2002 of the European Parliament and of the Council of 19 July 2002 on the 
application of international accounting standards (OJ L 243, 11.9.2002, p. 1). 
Report on International Financial Reporting Standards (IFRS) and the Governance of the International 
Accounting  Standards  Board  (IASB)  (2006/2248(INI)),  EP,  Committee  on  Economic  and  Monetary 
Affairs, Rapporteur: Alexander Radwan, A6-0032/2008, 5.2.2008, p. 10. 
Including the study conducted by Ramboll Management, commissioned by the Commission: Study on 
Administrative  Costs  of  the  EU  Company  Law  Acquis,  July  2007,  available  on  the  Commission 
website: 
http://ec.europa.eu/internal_market/company/docs/simplification/final_report_company_law_administr
ative_costs_en.pdf 

EN 

3 

   EN 

 
                                                 
in  July  200711  identifying  potential  amendments/changes  to  the  Accounting 
Directives. Special attention was given to finding further relief for reporting by small 
and medium-sized companies. The Commission Services identified policy options to 
be considered and from these possible options selected for legislative action after a 
public consultation the following legislative measures. 

Removal of disclosure requirement for formation expenses 

A clear majority of respondents to the Commission's Communication supported the 
proposal.  A  small  number  of  respondents  argued  that  the  specific  disclosure 
concerned provided useful information.  

Removal  of  disclosure  requirements  for  breakdown  of  turnover  into  activity  and 
geographical markets for SMEs 

This proposal was supported by almost three quarters of those who responded to the 
Commission  Communication,  whilst  a  quarter  was  against.  Certain  commentators 
found the proposal useful for SMEs, but not for the other companies in the scope of 
the 4th Company Law Directive. 

2.1.2.  The interaction  between consolidation rules in the 7th Company Law  Directive and 

International Financial Reporting Standards 

Various  discussions  with  Member  States  and  constituents  have  shown  that  the 
relationship between the IAS Regulation and the 7th Company Law Directive is not 
clear in cases where parent companies have no material subsidiaries. Following the 
discussion  with  Member  States,  the  Commission  Services  included  this  issue  in  its 
above  mentioned  Communication,  as  it  is  linked  to  simplification,  and  proposed  to 
clarify the situation through an amendment to the 7th Company Law Directive. 

The  respondents  were  strongly  in  favour  of  such  a  proposal,  with  companies  being 
unanimously  positive.  Commentators  regarded  the  proposed  change  as  substantial 
simplification. 

2.2. 

Impact assessment 

2.2.1.  Removal of disclosure requirement for formation expenses 

All  Member  States  except  Denmark,  Sweden,  UK  allow  formation  expenses  to  be 
capitalised and require the disclosure of such expenses12. Companies in the scope of 
Article  11  (defining  small  companies)  of  the  4th  Company  Law  Directive  can 
already be exempted from this disclosure requirement according to Article 44 (2) of 
the  same  Directive.  This  exemption  has  been  widely  used,  and  only  Spain  requires 
this disclosure as a separate item of small companies. Some Member States require 
however  disclosure  as  intangible  fixed  assets.  The  effect  of  the  proposed  change 

11 

12 

Communication from the Commission on a simplified business environment for companies in the areas 
of company law, accounting and auditing - COM(2007) 394, 10.7.2007. Available on the Commission 
website: http://ec.europa.eu/internal_market/company/simplification/index_en.htm  
Report: Implementation of the Fourth Directive in Member States as per 1 January 1998, pages 2, 38, 
62. Available on DG MARKT's website at:   
http://ec.europa.eu/internal_market/accounting/docs/studies/1998-fourth-dir_en.pdf. 

EN 

4 

   EN 

 
                                                 
affects therefore mainly medium-sized companies. According to a study prepared by 
Ramboll Management there are approximately 240,000 medium-sized companies in 
the EU13. 

The  change  leads  to  a  reduction  of  reporting  burden  for  companies.  There  is  no 
significant  loss  of  information  for  users  of  accounts.  Information  on  formation 
expenses  cannot  be  considered  very  relevant  for  users.  Both  preparers  and  users 
benefit from the proposal. Other stakeholders are basically not affected.  

2.2.2.  Removal  of  disclosure  requirements  for  breakdown  of  turnover  into  activity  and 

geographical markets for SMEs 

All Member States require disclosure of the breakdown of turnover into activity and 
geographical markets14. The possibility granted by Article 44 (2) of the 4th Company 
Law  Directive  to  exempt  Article  11  (small)  companies  from  this  requirement  has 
been used by all Member States. The effect of the proposed change affects therefore 
medium-sized companies. The Commission Services assess that Member States will 
make  use  of  the  proposed  change,  despite  the  fact  that  the  minimum  legislative 
nature of the Directive would allow them to require more information. 

Removal of this requirement enables companies to structure their internal reporting 
according  to  management  needs,  rather  than  financial  reporting  requirements.  The 
change  leads  to  a  reduced  reporting  burden  for  companies.  There  is  no  significant 
loss  of  information  for  users  of  accounts.  Users  of  accounts  of  SMEs  and  other 
companies  in  the  scope  of  the  Directive  do  not  particularly  request  this  kind  of 
information.  It  could  also  disclose  certain  information  considered  confidential  for 
companies with only one line of business. Both preparers and users benefit from the 
proposal.  Certain  stakeholders  with  particular  interest  in  this  information  may  be 
affected, but this effect is considered limited. 

2.2.3.  Amendment to the 7th Company Law Directive in order to clarify the relationship of 
its consolidation rules with the rules of International Financial Reporting Standards 

The  problem  seems  to  be  very  specific,  and  concentrated  to  some  larger  Member 
States.  Smaller  Member  States  seem  to  be  less  affected  mainly  due  to  the  smaller 
number of listed groups.  Furthermore certain Member States have not  enforced the 
preparation  of  such  accounts,  but  may  be  inclined  to  do  so  after  the  clarification 
given  in  discussions  in  the  Accounting  Regulatory  Committee  during  2007.  In 

13 

14 

Ramboll  Management.  July  2007.  Study  on  administrative  costs  of  EU  Company  Law  Acquis. 
Available on DG MARKT's website at: 
http://ec.europa.eu/internal_market/company/docs/simplification/final_report_company_law_administr
ative_costs_en.pdf. 
Implementation  of  the  Fourth  Directive  in  Member  States,  Summary  of  findings  from  a  study  on  the 
implementation of Fourth Directive 78/660/EEC in the Member States of the European Union, As per 1 
January  1998,  EC,  Internal  Market  DG,  Financial  services  –  Financial  information  and  company  law 
(see note nr. 10), p. 54, 59. 

EN 

5 

   EN 

 
                                                 
 
particular  in  the  UK  and  in  France  there  seem  to  be  a  number  of  cases  where  the 
preparation of such accounts causes problems15. 

The  preparation  of  these  accounts  entails  significant  costs  without  corresponding 
benefits  to  the  company.  These  accounts  also  need  to  be  audited,  which  entails 
additional large costs. Under normal circumstances there is no loss of information as 
these consolidated accounts are virtually identical to the individual accounts. There 
may however be very few individual cases where a certain loss of information could 
occur. The Commission Services assess this loss of information as insignificant. The 
winners  are  parent  companies  with  immaterial  subsidiaries  that  have  to  prepare 
consolidated accounts.  

2.3.  Monitoring and evaluation 

This  proposal  should  be  seen  in  connection  with  other  simplification  measures  and 
their impact shall be evaluated together. This proposal represents only a first part of 
the  simplification  exercise  in  accounting.  The  efficiency  of  the  proposed  measures 
should  be  monitored  in  future  steps  of  the  simplification  process  and,  if  needed, 
further changes can be suggested in a forthcoming revision. 

3. 

LEGAL ELEMENTS OF THE PROPOSAL 

3.1. 

Legal basis 

Article 44(1) of the Treaty establishing European Community16. 

3.2. 

Subsidiarity and proportionality principles 

This  proposal  does  not  fall  under  the  exclusive  competence  of  the  Community. 
Action  at  EU  level  is  necessary  with  a  view  to  dealing  with  these  problems  to  the 
extent  that  obligations  entailing  administrative  burdens  derive  from  EU  directives. 
The objective of the action is the reduction of administrative burden by simplifying 
financial  reporting  for  SMEs  in  a  short-term  perspective  and  clarifying  the 
interaction  between  consolidation  rules  in  Directive  83/349/EEC  and  IFRS  without 
loss of relevant information and clarification of the interaction between rules in the 
7th Company Law Directive and International Financial Reporting Standards. 

The proposal continues the Community's principle based approach to EU-Accounting 
regulation.  Also,  the  Accounting  Directives  represent  "minimum  harmonisation"17. 
This  ensures  proportionality  and  leaves  flexibility  to  authorities  and  economic 
operators  on  how  to  fulfil  the  objectives  while  minimising  their  financial  and 
administrative burden. Furthermore, an analysis of national legislation should ideally 
take  place  and  further  simplification  measures  at  national  level  might  be 
recommendable. 

15 

16 
17 

According to data provided by the UK, there are 1.6m active limited liability companies in UK, with 
51 000 forming groups out of which only 10000 provide consolidated accounts. It was identified that 
1 000 groups provide consolidated accounts while having only non-material subsidiaries. 
OJ C 325, 24.12.2002, p. 35. 
Member States can put in place more extensive requirements nationally. The Directives already contain 
numerous options for SMEs, but many of those have not been taken up by Member States. 

EN 

6 

   EN 

 
                                                 
The  objective  can  only  be  achieved  through  the  modification  of  the  relevant  EU 
rules; action at EU level is therefore justified. The proposed modifications are limited 
to what is necessary in order to remove the unnecessary administrative burdens in the 
areas concerned and are proportionate to this objective.  

3.3. 

Choice of instrument 

The proposed instrument amends existing directives and is therefore a directive. 

4. 

EXPLANATION OF THE PROPOSAL 

4.1.1.  Removal of disclosure requirement for formation expenses 

Formation expenses are different types of costs related to the creation of a company. 
For  example,  registration  fees  or  legal  assistance  costs.  These  can  under  some 
circumstances be treated as an asset in the balance sheet. If this is the case, Article 
34(2) of the 4th Company Law Directive requires that these “formation expenses” are 
explained in the notes to the accounts. Small companies can be exempted from this 
disclosure requirement in accordance with Article 44(2) of the same Directive. 

The  Commission  suggests  extending  the  scope  of  these  exemptions  also  to  include 
medium-sized companies. Accordingly, the Commission proposes in Article 44(2) of 
the 4th Company Law Directive to add medium sized companies within the context of 
Article 44(2) of this Directive and extending so the discretion of Member States to 
relieve these companies from the obligation imposed by Article 34(2). 

4.1.2.  Removal  of  disclosure  requirements  for  breakdown  of  turnover  into  activity  and 

geographical markets for SMEs 

The 4th Company Law Directive requires that a breakdown of turnover into activity 
and geographical markets is disclosed. This is required for all companies, but small 
companies can be excluded in accordance with Article 44(2) of the same Directive. 

The  Commission  suggests  extending  the  scope  of  these  exemptions  also  to  include 
medium-sized companies. Accordingly, the Commission proposes in Article 44(1) of 
the 4th Company Law Directive to add medium sized companies within the context of 
Article 43(1)(8) of this Directive and extending so the discretion of Member States to 
relieve these companies from the obligation imposed by Article 43(1)(8). 

4.1.3.  Amendment to the 7th Company Law Directive in order to clarify the relationship of 
its consolidation rules with the rules of International Financial Reporting Standards 

The relationship between the IAS Regulation and the 7th Company Law Directive is 
not  clear  in  cases  where  parent  companies  have  no  material  subsidiaries.  The 
problematic  issue  is  whether  such  a  parent  company  would  fall  under  the  IAS 
Regulation – and therefore have to prepare IFRS accounts – or not. 

The  Commission  considers  it  excessive  to  require  the  preparation  of  consolidated 
accounts in the situation where a parent company has only immaterial subsidiaries. It 
is  unreasonable  to  require  a  separate  set  of  accounts  as  the  consolidated  accounts 

EN 

7 

   EN 

 
would be - in this scenario - quasi identical to the individual accounts (which do not 
fall mandatorily into the IFRS regime following the IAS regulation). 

Accordingly,  the  Commission  proposes  in  Article  13  of  the  7th  Company  Law 
Directive  to  add  a  new  paragraph  2a  which  would  exempt  any  parent  undertaking 
governed  by  its  national  law  from  the  obligation  to  draw  up  consolidated  accounts 
and  consolidated  annual  report  if  this  parent  undertaking  has  only  subsidiary 
undertakings  considered  as  not  material  (for  the  purposes  of  Article  16(3)),  both 
individually or as a whole. 

5. 

BUDGET IMPLICATIONS 

There are none for the Community budget. 

EN 

8 

   EN 

 
2008/0084 (COD) 

Proposal for a 

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL  

amending Council Directives 78/660/EEC and 83/349/EEC as regards certain disclosure 
requirements for medium-sized companies and obligation to draw up consolidated 
accounts  

(Text with EEA relevance) 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article 44(1) thereof, 

Having regard to the proposal from the Commission18, 

Having regard to the opinion of the European Economic and Social Committee19, 

Acting in accordance with the procedure laid down in Article 251 of the Treaty20, 

Whereas: 

(1) 

(2) 

(3) 

18 
19 
20 
21 
22 

23 

In  its  Conclusions,  the  European  Council  of  8  and  9  March  2007  underlined  that 
reducing  administrative  burden  is  important  for  boosting  the  European  economy, 
especially  considering  the  benefits  this  could  bring  for  small  and  medium-sized 
companies. It stressed that a strong joint effort of the European Union and the Member 
States is necessary to reduce administrative burdens.  

Accounting  and  auditing  have  been  identified  as  an  area  for  reducing  administrative 
burden for companies within the Community.  

The  Commission  Communication  on  10  July  200721  on  a  simplified  business 
environment  for  companies  in  the  areas  of  company  law,  accounting  and  auditing 
identifies necessary amendments to Fourth Council Directive 78/660/EEC of 25 July 
1978 based on Article 54(3)(g) of the Treaty on the annual accounts of certain types of 
companies22  and  Seventh  Council  Directive  83/349/EEC  of  13  June  1983  based  on 
Article 54(3)(g) of the Treaty on consolidated accounts23. Special attention was given 
to finding further relief from reporting by small and medium-sized companies.  

OJ C […] […], p.[…] 
OJ C […] […], p.[…] 
OJ C […] […], p.[…] 
COM(2007) 394, 10.7.2007. 
OJ L 222, 17.8.1978, p. 11. Directive as last amended by Directive 2006/99/EC (OJ L 363, 20.12.2006, 
p. 137) 
OJ L 193, 18.7.1983, p. 1. Directive as last amended by Directive 2006/99/EC. 

EN 

9 

   EN 

 
                                                 
(4) 

(5) 

(6) 

In the past, a number of changes have been made in order to enable companies falling 
within  the  scope  of  Directives  78/660/EEC  and  83/349/EEC  to  use  accounting 
methods  in  accordance  with  International  Financial  Reporting  Standards  (IFRS). 
Pursuant  to  Regulation  (EC)  No  1606/2002  of  the  European  Parliament  and  of  the 
Council  of  19  July  2002  on  the  application  of  international  accounting  standards24 
companies  whose  securities  are  admitted  to  trading  on  a  regulated  market  of  any 
Member  State  have  to  prepare  their  consolidated  accounts  in  accordance  with  IFRS, 
and  are  consequently  relieved  from  most  of  the  requirements  in  Directives 
78/660/EEC and 83/349/EEC. Those Directives, however, still form the basis for small 
and medium-sized companies´ accounting in the Community. 

Small  and  medium-sized  companies  are  often  subject  to  the  same  rules  as  larger 
companies, but their specific accounting needs have rarely been assessed. In particular 
the increasing number of disclosure requirements raises concerns for such companies. 
Extensive  reporting  rules  create  a  financial  burden  and  can  hinder  efficient  use  of 
capital for productive purposes. 

The  application  of  Regulation  (EC)  No  1606/2002  has  also  highlighted  the  need  to 
clarify  the  relationship  between  the  accounting  standards  required  by  Directive 
83/349/EEC and IFRS.  

(7)  Where formation expenses can be treated as an asset in the balance sheet, Article 34(2) 
of Directive 78/660/EEC requires that those expenses are explained in the notes to the 
accounts.  Small  companies  can  be  exempted  from  this  disclosure  requirement  in 
accordance  with  Article  44(2)  of  that  Directive.  In  order  to  reduce  the  unnecessary 
administrative burden, it should be possible to exempt also medium-sized companies 
from these disclosures. 

(8) 

(9) 

Directive  78/660/EEC  requires  that  a  breakdown  of  turnover  into  activity  and 
geographical  markets  is  disclosed.  This  is  required  for  all  companies,  but  small 
companies can be excluded in accordance with Article 44(2) of that Directive. In order 
to reduce the unnecessary administrative burden, it should be possible to exempt also 
medium-sized companies from this disclosure requirement. 

Directive  83/349/EEC  requires  a  parent  company  to  prepare  consolidated  accounts 
even if the only subsidiary or all of the subsidiaries as a whole are not material for the 
purposes of Article 16(3) of Directive 83/349/EEC. As a consequence these companies 
fall under Regulation (EC) No 1606/2002 and therefore have to prepare consolidated 
financial  statements  in  accordance  with  IFRS.  This  requirement  is  considered  to  be 
burdensome  where  a  parent  company  has  only  immaterial  subsidiaries.  Therefore  it 
should  be  possible  to  exempt  a  parent  undertaking  from  the  obligation  to  draw  up 
consolidated accounts and a consolidated annual report if that parent undertaking has 
only  subsidiary  undertakings  considered  as  not  material,  both  individually  or  as  a 
whole. 

(10)  Since the objectives of this Directive, namely reducing administrative burdens relating 
to certain disclosure requirements for medium-sized companies and the obligation to 
draw  up  consolidated  accounts  for  certain  companies  within  the  Community,  cannot 

24 

OJ L 243, 11.9.2002, p. 1. 

EN 

10 

   EN 

 
 
                                                 
be  sufficiently  achieved  by  Member  States  and  can  therefore,  by  reason  of  the  scale 
and  effects,  be  better  achieved  at  Community  level,  the  Community  may  adopt 
measures in accordance with the principle of subsidiarity as set out in Article 5 of the 
Treaty. In accordance with the principle of proportionality, as set out in that Article, 
this  Directive  does  not  go  beyond  what  is  necessary  in  order  to  achieve  those 
objectives. 

(11)  Directives 78/660/EEC and 83/349/EEC should therefore be amended accordingly, 

HAVE ADOPTED THIS DIRECTIVE: 

Article 1 
Amendments to Directive 78/660/EEC 

Article 44 of Directive 78/660/EEC is amended as follows: 

1. 

The following paragraph 1a is inserted: 

“(1a) Member States may permit the companies referred to in Article 27 to draw up 
abridged  notes  on 
in 
Article 43(1)(8).” 

their  accounts  without 

information 

required 

the 

2. 

The following paragraph 2a is inserted: 

“(2a)  Member  States  may  permit  the  companies  referred  to  in  Article  27  to  be 
exempted  from  the  obligation  to  disclose  in  the  notes  on  their  accounts  the 
information prescribed in Article 34(2).” 

Article 2 
Amendment to Directive 83/349/EEC 

In Article 13 of Directive 83/349/EEC the following paragraph 2a is inserted: 

”(2a)  Without  prejudice  to  Articles  4(2)  and  Articles  5  and  6,  any  parent  undertaking 
governed  by  the  national  law  of  a  Member  State  which  only  has  subsidiary  undertakings 
which are not material for the purposes of Article 16(3), both individually or as a whole, shall 
be exempted from the obligation imposed in Article 1(1).” 

Article 3 
Transposition 

1. 

Member  States  shall  bring  into  force  the  laws,  regulations  and  administrative 
provisions  necessary  to  comply  with  this  Directive  by  30  April  2010  at  the  latest. 
They  shall  forthwith  communicate  to  the  Commission  the  text  of  those  provisions 
and a correlation table between those provisions and this Directive. 

When  Member  States  adopt  those  provisions,  they  shall  contain  a  reference  to  this 
Directive  or  be  accompanied  by  such  a  reference  on  the  occasion  of  their  official 
publication. Member States shall determine how such reference is to be made. 

EN 

11 

   EN 

 
2. 

Member States shall communicate to the Commission the text of the main provisions 
of national law which they adopt in the field covered by this Directive. 

Article 4 
Entry into force 

This Directive shall enter into force on the twentieth day following that of its publication in 
the Official Journal of the European Union. 

Article 5 
Addressees 

This Directive is addressed to the Member States. 

Done at Brussels, 

For the European Parliament 
The President 

For the Council 
The President 

EN 

12 

   EN