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PURPOSE: to
facilitate cross-border investments by improving EU-wide comparable financial
statements and reports. LEGISLATIVE
ACT: Directive 2006/46/EC of the European Parliament and of the Council
amending Council Directive 78/660/EEC on the annual accounts of certain types
of companies; 83/349/EEC on consolidated accounts; 86/635/EEC on the annual
accounts and consolidated accounts of banks and other financial institutions
and 91/674/EEC on the annual accounts and consolidated accounts of insurance
undertakings. CONTENT: this
Directive amends a number of the EU’s accounting Directives by improving
disclosure provisions whereby listed EU companies will be obliged to provide
annual corporate governance statements. Greater disclosure is also expected
vis-à-vis the use of off-balance sheet arrangements and unusual transaction
with related parties – i.e. a spouse or board member. Further, the Directive
introduces new thresholds for Small and Medium Sized Enterprises (SME’s). In other
provisions, the amended Directives establish the principle of collective
responsibility for board members at an EU level as well as introducing an
obligation for listed EU companies to provide annual corporate governance
statements. These amendments will allow the Member States to align their laws
with that of the international accounting standard, IAS 39, on fair value measurement.
Threshold (balance sheet total and net turn over) defining SME limited
liability companies will be increased by 20%. The new
thresholds read as follows: Small
companies - Balance sheet total: (former threshold) EUR 3
650 000,00; (new threshold) EUR 4 400 000,00 - Net turn over: (former threshold) EUR 7 300
000,00; (new threshold) EUR 8 800 000,00 Medium
sized companies - Balance sheet total: (former threshold) EUR 14
600 000,00; (new threshold) EUR 17 300 000,00 - Net turn over: (former threshold) EUR 29 200
000, 00; (new threshold) EUR 35 000 000,00 ENTRY INTO
FORCE: 05/09/2006. TRANSPOSITION:
05/09/2008.
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