ACCOUNTING: NEW THRESHOLDS FOR SMALLER BUSINESSES EXEMPT FROM FINANCING REPORTING RULES.

Summary:A 25% increase in the financial threshold used in the definition of small and medium-sized enterprises (SMEs) in the EU's Accounting Directives was proposed by the European Commission on February 9. The effect of this change would be to increase the number of European SMEs exempt from EU financial reporting requirements. For Financial Services Commissioner Mario Monti, it would be "of immediate practical benefit to thousands of SMEs in the EU".

Under the Fourth and Seventh Directives 78/660/EEC and 83/349/EEC) on the annual accounts of conventional companies and consolidated accounts of groups of companies, the Member States have scope for exempting their SMEs from reporting and disclosure requirements imposed on limited liability companies. More specifically, the Member States may allow them to draw up and publish only an abridged balance sheet, abridged notes on the accounts and an abridged profit and loss account. Moreover, the national authorities...