Small companies in the European Union will be allowed to file pared-down annual financial statements, under a measure approved last week by the European Parliament.
Parliament voted during its June 12 meeting in Strasbourg to streamline the accounting rules for smaller companies as part of an overhaul of two existing accounting directives. The intended goal is to cut down on red tape faced by businesses. The new accounting directive allows smaller companies to produce abridged balance sheets and profit and loss statements. Information provided via notes will drop from an estimated 14 to 24 items to 8 to 13 items. The directive defines smaller companies as those with fewer than 50 employees, a turnover of not more than €8 million and/or a balance sheet total of not more than €4 million. Those thresholds would increase over time with inflation.
