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Seventh Directive: consolidated accounts of companies with limited liability
Seventh Directive: consolidated accounts of companies with limited liability
Seventh Directive: consolidated accounts of companies with limited liability
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Seventh Directive: consolidated accounts of companies with limited liability
This Seventh Company Law Directive coordinates national laws on consolidated (i.e. group) accounts. Together with the Fourth Directive on the annual accounts of public limited liability companies, it belongs to the family of "accounting directives" that form the arsenal of Community legal acts governing company accounts.
ACT
Seventh Council Directive 83/349/EEC of 13 June 1983 based on Article 54(3)(g) of the Treaty on consolidated accounts [See amending acts].
SUMMARY
The following text concerns a consolidation of existing Directives on consolidated accounts of companies with limited liability.
A parent company and all its subsidiaries are companies to be consolidated where either the parent company or one or more subsidiaries is established as a company with limited liability if the parent company exercises a dominant influence over the subsidiary.
These Directives define the circumstances in which consolidated accounts are to be drawn up. Any company (parent company) which legally controls another company (subsidiary company) is under a duty to prepare consolidated accounts. In most cases, legal control takes the form of the holding of a majority of voting rights. Member States may also require consolidated accounts to be prepared in other cases where a parent company has only a minority shareholding but exercises de facto control. They may provide for exemption from this obligation. The figures given in euro in Directive 78/660/EEC serve as thresholds for defining the groups which can be exempted completely from the consolidated accounts requirement.
The Directive sets out the methods of drawing up consolidated accounts:
The Annex states that certain information must be provided in the notes, on such things as valuation methods, the names and the registered offices of the undertakings included in the consolidation, total of certain types of debts, etc.
The Directives also regulate the contents of the consolidated annual report. This must include at least a fair review of the development of business and the position of the undertakings included in the consolidation taken as a whole, and certain indications for each of those undertakings (number and nominal value of shares, etc.).
The Directives establish a system of auditing under which a company which prepares consolidated accounts must have them audited by one or more persons authorised to audit accounts under the laws of the Member State which govern that company. The person or persons responsible for auditing the consolidated accounts must also verify that the consolidated annual report is consistent with the consolidated accounts for the same financial year.
Context
The Directives lay down rules on disclosure. The consolidated accounts, the consolidated annual report and the auditor's report must be published in accordance with the provisions of the first Directive.
References
Act |
Entry into force - Date of expiry |
Deadline for transposition in the Member States |
Official Journal |
Directive 83/349/EEC [adoption: consultation CNS/1976/1011] |
29.6.1983 |
31.12.1987 |
OJ L 193, 18.7.1983 |
Amending act(s) |
Entry into force |
Deadline for transposition in the Member States |
Official Journal |
Directive 89/666/EEC |
3.1.1990 |
1.1.1992 |
OJ L 395, 30.12.1989 |
Directive 90/604/EEC |
19.11.1990 |
1.1.1993 |
OJ L 317, 16.11.1990 |
Directive 90/605/EEC |
20.11.1990 |
31.12.1992 |
OJ L 317, 16.11.1990 |
Directive 2001/65/EC |
16.11.2001 |
31.12.2003 |
OJ L 283, 27.10.2001 |
Directive 2003/51/EC |
17.7.2003 |
1.1.2005 |
OJ L 178, 17.7.2003 |
Directive 2006/43/EC |
29.6.2006 |
29.6.2008 |
OJ L 157, 9.6.2006 |
Directive 2006/46/EC |
5.9.2006 |
5.9.2008 |
OJ L 224, 16.8.2006 |
Directive 2006/99/EC |
1.1.2007 |
1.1.2007 |
OJ L 363, 2012.2006 |
Directive 2009/49/EC |
16.7.2009 |
1.1.2011 |
OJ L 164 of 26.6.2009 |
The successive amendments and corrigenda to Directive 83/349/ECC been incorporated into the original text. This consolidated version is of mere documentary value.
Last updated: 02.12.2009