CELEX: 51988PC0292
Language: en
Date: 1988-10-14
Title: PROPOSAL FOR A COUNCIL DIRECTIVE AMENDING DIRECTIVE 78/660/EEC ON ANNUAL ACCOUNTS AND DIRECTIVE 83/349/EEC ON CONSOLIDATED ACCOUNTS WITH RESPECT TO THE EXEMPTIONS FOR SMALL AND MEDIUM-SIZED COMPANIES AND TO THE DRAWING UP AND PUBLICATION OF ACCOUNTS IN ECU

11. 11. 88                           Official Journal of the European Communities                                        No C 287/5
                                                             II
                                                     (Preparatory Acts)
                                                COMMISSION
              Proposal for a Council Directive amending Directive 78/660/EEC on annual accounts and
              Directive 83/349/EEC on consolidated accounts with respect to the exemptions for small and
                  medium-sized companies and to the drawing up and publication of accounts in ECU
                                              COM(88) 292 final — SYN 158
                            (Submitted by the Commission to the Council on 24 October 1988)
                                                      (88/C 287/06)
THE COUNCIL OF THE EUROPEAN COMMUNITIES,                         competition between small companies in                       different
                                                                 M e m b e r States, d e p e n d i n g on w h e t h e r or not the
                                                                 exemptions are available there, and undermines the
Having regard to the Treaty establishing the European
                                                                 objective of ensuring the comparability and equivalence
Economic Community, and in particular Article 54
                                                                 of the information given in c o m p a n y a c c o u n t s ;
thereof,
Having regard to the proposal from the Commission,               W h e r e a s , in o r d e r to simplify and h a r m o n i z e the
                                                                 accounting         obligations        for      small companies,    the
                                                                 exemptions provided for in Directive 7 8 / 6 6 0 / E E C in
In cooperation with the European Parliament,
                                                                 favour of small companies and relating to the d r a w i n g
                                                                 u p , auditing and publication of accounts should be m a d e
Having regard to the opinion of the Economic and                 mandatory;
Social Committee,
Whereas national provisions concerning the presentation          W h e r e a s it is desirable for this purpose that some small
and content of annual accounts and annual reports of             closely-held companies should be completely exempt
public and private limited companies, concerning the             from the rules prescribed by Directive 7 8 / 6 6 0 / E E C ,
valuation methods used therein and concerning the                subject to appropriate safeguards for the interests of
publication of such accounts and reports have been               shareholders and third parties; w h e r e a s an exemption for
                                                                 such companies is justified from the point of view of the
harmonized by Council Directive 78/660/EEC ('), as
                                                                 single E u r o p e a n market because they are unlikely to
last amended by the Act of Accession of Spain and
                                                                 engage in i n t r a - C o m m u n i t y t r a d e ;
Portugal;
Whereas the administrative burdens on small and                  W h e r e a s a certain flexibility in the definition of small
medium-sized companies should be reduced in                      and medium-sized companies is justified by a different
accordance with the Council resolution of 3 November             economic environment in M e m b e r States;
1986 (2) and with the Council resolution of 30 June 1988
on the improvement of the business environment and the
promotion of the development of enterprises, in
                                                                 W h e r e a s provision should be m a d e for exempting
particular SME's, in the Community (3), which calls
                                                                 companies w h o s e administrative or m a n a g e m e n t b o d y
more especially for a substantial alleviation of the obli-
                                                                 consists of only one person from the requirement of
gations arising from Directive 78/660/EEC;
                                                                 including details of the director's r e m u n e r a t i o n and any
                                                                 advances or credits granted to him in the notes on the
Whereas Directive 78/660/EEC allows Member States                accounts;
to grant exemptions for certain companies of minor
economic and social importance; whereas Member States
have made widely-varying use of this possibility; whereas        W h e r e a s it is also necessary to simplify the requirements
this variation in requirements may cause distortions of          imposed on small companies for d r a w i n g up and
                                                                 publishing notes on the a c c o u n t s ; whereas                 such
(') OJ No L 222, 14. 8. 1978, p. 11.                             companies should be exempt from the obligation to
(2) OJ No C 287, 14. 11. 1986, p. 1.                             supply certain items of information that can be r e g a r d e d
(3) O] No C 197, 27. 7. 1988, p. 6.                              as less important for the smaller c o m p a n y ; whereas for
 ---pagebreak--- No C 287/6                                Official Journal of the European Communities                                11. 11. 88
the same reason such companies should be exempt from                 3.     When Member States require such companies to
the requirement to present an annual report, provided                present their annual accounts to the shareholders or
that certain important items of information normally                 members of the company using a layout, such layout
given in the report are supplied in the notes on the                 may not go beyond that which is prescribed by this
accounts;                                                            Directive for companies falling within Article 11.'
Whereas small and medium-sized companies should be
allowed to keep the accounting documents available to                                           Article 2
the public at the registered office of the company
without disregarding the basic idea that these documents             Article 2 (6) of Directive 78/660/EEC is replaced by the
should be available to the public without restriction;               following:
Whereas it is important to promote European monetary                     '6.     Except in relation to companies falling within
integration by allowing companies to draw up and                         Article 11, the Member States may authorize or
publish their accounts in ECU; and whereas Council                       require the disclosure in the annual accounts of other
Directives 78/660/EEC            and 83/349/EEC ('), as                  information as well as that which must be disclosed
amended by the Act of Accession of Spain and Portugal,                   in accordance with this Directive.'
should be clarified in this respect so as to require
companies availing themselves of this possibility to state
the method they have used for conversion into ECU in                                            Article 3
the notes on the accounts,
                                                                     The last sentence of Article 4 (1) of             Directive
                                                                     78/660/EEC is replaced by the following:
HAS ADOPTED THIS DIRECTIVE:
                                                                         'Except in relation to companies falling within Article
                         SECTION 1                                       11, such subdivision or new items may be required by
                                                                         the Member States.'
    Exemptions for small and medium-sized companies
                           Article 1                                                            Article 4
The following        Article    is   inserted    in   Directive      Article 11 of the Directive 78/660/EEC is replaced by
78/660/EEC:                                                          the following:
     'Article la                                                          Article 11
     1.    This Directive shall not apply to companies
                                                                         1.     Companies which on their balance sheet dates
    falling within Article 11 where the following
                                                                         do not exceed the limits of two of the following three
    additional conditions are fulfilled:
                                                                         criteria:
    (a) the company is not affiliated with other under-
         takings within the meaning of Article 41 of                     — balance sheet total: 1 550 000 ECU,
         Directive 83/349/EEC and is not linked to                       — net turnover: 3 200 000 ECU,
         another undertaking by virtue of a participating
                                                                         — average number of employees during the financial
         interest;
                                                                             year: 50
    (b) the shareholders or members of the company are
         the same persons as the members of its adminis-                 may draw up abridged balance sheets showing only
         trative or management body and are natural                      those items preceded by letters and Roman numerals
         persons;                                                        in Articles 9 and 10, disclosing separately the infor-
                                                                         mation required in brackets in D (II) under "Assets"
    (c) the shares of the company are registered and                     and C under "Liabilities" in Article 9 and in D (II) in
         under its statutes or instrument of incorporation               Article 10, but in total for each.
         may not be transferred without the company's
         consent;                                                        Article 15 (3) (a) and (4) shall not apply to abridged
    (d) the exemption is disclosed in accordance with                    balance sheets.
         Article 3 of Directive 68/151/EEC.
                                                                         2.     However, Member States may simultaneously
    2.     The Member States shall provide appropriate                   and in like proportions increase or decrease by up to
    penalties for failure by such companies to keep                      50 % the thresholds concerning the balance sheet
    proper accounts.                                                     total and the net turnover referred to in paragraph 1.
                                                                         As to the average number of employees referred to in
                                                                         paragraph 1, Member States may adopt a lower
(•) OJ No L 193, 18. 7. 1983, p. 1.                                      figure with a minimum number of 25.'
 ---pagebreak---  11. 11. 88                             Official Journal of the European Communities                               No C 287/7
                            Article 5                                  Where this waiver is applied, companies other than
                                                                       those falling within Article 11 must disclose in the
Article 27 of Directive 78/660/EEC is replaced by the
                                                                       notes on the accounts the extent to which the taxes
following:
                                                                       on the profit or loss affect the profit or loss on
                                                                       ordinary activities and the "Extraordinary profit or
      'Article 27                                                      loss".'
     1.     Member States shall permit companies falling                                       Article 7
    within Article 11, and may permit other companies
    which on their balance sheet dates do not exceed the          The following paragraph is added to Article 43 of
     limits of two of the following three criteria:                Directive 78/660/EEC:
                                                                       '3.      Member States may waive the requirement to
    — balance sheet total: 6 200 000 ECU,                              provide the information referred to in paragraph 1
    — net turnover: 12 800 000 ECU,                                    (12) and (13) for companies whose administrative or
    — average number of employees during the financial                 management body consists of only one person.'
         year: 250
                                                                                               Article 8
    to adopt layouts different from those prescribed in
    Articles 23 to 26 within the following limits:                Article 44 of Directive 78/660/EEC is replaced by the
                                                                  following:
    (a) in Article 23: 1 to 5 inclusive may be combined                 Article 44
          under one item called "Gross profit or loss";
                                                                       1.     Companies falling within Article 11 may draw
    (b) in Article 24: A ( l ) , A (2) and B (1) to B (4)              up abridged notes on their accounts without the
          inclusive may be combined under one item called              information referred to in Article 43 (1) (5) to (13).
          "Gross profit or loss";                                      However, the notes must disclose the information
                                                                       referred to in Article 43 (1) in total for all the items
                                                                       concerned.
    (c) in Article 25: (1), (2), (3) and (6) may be
          combined under one item called "Gross profit or
                                                                       2.     The companies referred to in paragraph 1 shall
          loss";
                                                                       also be exempt from the obligation to disclose in the
                                                                       notes on the accounts the information referred to in
    (d) in Article 26: A (1), B (1) and B (2) may be                   Article 15 (3) (a) and (4), Articles 18, 21 and 29 (2),
          combined under one item called "Gross profit or              Article 34 (2), Article 40 (2), and the second
          loss".                                                       subparagraph of Article 42.
          Article 12 shall apply.                                      3.     Article 12 shall apply.'
    2.      However, for the application of this Directive,                                    Article 9
    Member States may simultaneously and in like
    proportions increase by up to 50 % the thresholds             The introductory phase of Article 45 (1) of Directive
    concerning the balance sheet total and the net                78/660/EEC is replaced by the following:
    turnover referred to in paragraph 1.'                              '1.      Member States shall permit companies falling
                                                                       within Article 11 and may permit other companies to
                                                                       treat the disclosures prescribed in Article 43 (1) (2) in
                            Article 6                                  such a way as:'
Article 30 of Directive 78/660/EEC is replaced by the
following:                                                                                    Article 10
                                                                  The following paragraph is added to Article 46 of
      Article 30                                                   Directive 78/660/EEC:
     Member States shall permit companies falling within                    '3.    Companies falling within Article 11 shall
    Article 11, and may permit other companies, to show                not be required to prepare an annual report, provided
     taxes on the profit or loss on ordinary activities and            that the information referred to in paragraph 2 (a)
    taxes on the extraordinary profit or loss in total as              and (d) is given in the notes on the accounts.'
     one item in the profit and loss account before "Other
     taxes not shown under the above items". In the case,                                     Article 11
     "profit or loss on ordinary activities after taxation"
     shall be omitted from the layouts prescribed in              Article 47 of Directive 78/660/EEC is amended as
    Articles 23 to 26.                                             follows:
 ---pagebreak--- No C 287/8                             Official Journal of the European Communities                                11. 11. 88
1. Paragraph 2 is replaced by the following:                          'SECTION 11a
   '2.    Notwithstanding paragraph 1, companies falling              Drawing up and publication of accounts in ECU
   within Article 11 may publish:
   (a) abridged balance sheets in accordance with Article             Article 51a
        11;                                                           Companies may draw up and publish their accounts
   (b) abridged notes on the accounts in accordance                   in ECU at the exchange rate prevailing on the
        with Article 44.                                              balance sheet date. The method to be used for
   Article 12 shall apply.                                            conversion into ECU is described in the notes on the
                                                                      accounts.'
   Such companies shall not be required to publish their
   profit and loss account or their annual report.'
                                                                                            Article 14
2. The following paragraph 4 is inserted:
                                                                  The following     section    5a   is inserted in  Directive
   '4.    Notwithstanding paragraph 1, subparagraph 1,            83/349/EEC:
   Member States shall permit companies falling within
   Article 11 and may permit companies falling within                 'SECTION 5a
   Article 27 to make the accounting documents which
   must be published in accordance with the present                   Drawing up and publication of consolidated accounts
   Directive available to the public at the company's                 in ECU
   registered office. It must be possible for anyone to
   obtain a copy of these documents upon request,                     Article 38a
   including by mail. The price of such a copy must not
                                                                      Consolidated accounts may be drawn up and
   exceed its administrative cost.
                                                                      published in ECU at the exchange rate prevailing on
   Member States shall provide that the place where the               the balance sheet date. The method to be used for
   public can obtain these documents is published by                  conversion into ECU is described in the notes on the
   means of a reference, in accordance with Article 3 (4)             consolidated accounts.'
   of Directive 68/151/EEC. Member States shall also
   provide appropriate sanctions for failure by companies
   to publish these documents in accordance with the                                      SECTION 3
   present paragraph.
                                                                                        final provisions
   This paragraph shall not apply to companies having
   made a public issue of securities.'                                                      Article 15
                                                                  1.    The Member States shall bring into force the laws,
                          Article 12
                                                                  regulations and administrative provisions necessary to
Article 51 (2) of Directive 78/660/EEC is replaced by             comply with this Directive by 1 January 1990. They shall
the following:                                                    forthwith inform the Commission thereof.
    '2.    Companies falling within Article 11 shall be           2.    A Member State may provide that the provisions of
    exempt from the requirement referred to in para-              this Directive shall first apply to accounts for financial
    graphe 1.                                                     years beginning on 1 January 1992 or during the
    Article 12 shall apply.'                                      calendar year 1992.
                                                                  3.    The Member States shall communicate to the
                         SECTION 2                                Commission the texts of the main provisions of national
                                                                  law which they adopt in the field covered by this
     Drawing up and publication of accounts in ECU                Directive.
                          Article 13
                                                                                            Article 16
The following      section   11a is inserted   in  Directive
78/660/EEC:                                                       This Directive is addressed to the Member States.