ICAEW calls for clarity over country-by-country reporting

by Richard Crump

More from this author

28 May 2014

  • Financial Director
  • Comments
ICAEW flag

NEW REQUIREMENTS for companies in the extractive sector to report on payments to governments on a country-by-country basis need to be clear to achieve the purpose of increasing transparency, the ICAEW has said in a letter to the Department for Business, Innovation and Skills (BIS).

Last year, the EU imposed laws that force large extractive companies to shed light on their dealings with governments on a country-by-country basis. Under the rules, which came as part of changes to the EU Accounting Directive, European companies must disclose full information on payments of more than €100,000 (£85,000) to governments in resource rich countries.

BIS recently consulted on the UK implementation of the new reporting requirements and the ICAEW has raised concerns about the lack of clarity over how group companies will be impacted.

"We are concerned that the current proposals for UK implementation is lacking in clarity in certain areas, partly due to the wording in the underlying Directive. The regulation needs to be absolutely clear if it is to achieve its purpose," said Nigel Sleigh-Johnson, head of the ICAEW's financial reporting faculty.

The EU Accounting Directive changes will require large companies engaged in the extraction of oil, mineral and gas and the logging of primary forests to produce an ‘extractives report', which may be challenging to some companies.

"The collection and collation of the information required for the ‘extractives report' may represent a significant challenge for some companies. One reason is that the information has to be provided on cash-basis, while companies' accounting systems are accruals-based. Good guidance to the relevant companies is therefore crucial to ensuring the legislation is implemented smoothly and consistently," Sleigh-Johnson said.

The transposition of the EU Accounting Directive into UK law is only one of several initiatives touching on country-by-country reporting. Changes to the EU Transparency Directive will, when introduced in the UK, expand the types of company in the extractives sector that have to provide such information.

The EU Capital Requirements Directive IV, which applies to credit institutions and certain investment firms also contain country-by-country reporting requirements. Additionally, the OECD is looking at country-by-country reporting as part of its Base Erosion and Profit Shifting (BEPS) initiative.

The UK has until July 2015 to implement the EU requirements in UK law.

Visitor comments

blog comments powered by Disqus

Add your comment

We won't publish your address

By submitting a comment you agree to abide by our Terms & Conditions

Your comment will be moderated before publication



Financial Planner

The Ministry of Defence Surgeon General’s (SG) Finance Department, Lichfield, Staffordshire, Permanent, Full Time, £ £30,008




Get the latest financial news sent directly to your inbox

  • Best Practice
  • Business
  • Daily Newsletter
  • Essentials


Search for jobs
Click to search our database of all the latest accountancy roles

Create a profile
Click to set up your profile and let the best recruiters find you

Jobs by email
Sign up to receive regular updates with the latest roles suitable for you



Why budgeting fails: One management system is not enough

If budgeting is to have any value at all, it needs a radical overhaul. In today's dynamic marketplace, budgeting can no longer serve as a company's only management system; it must integrate with and support dedicated strategy management systems, process improvement systems, and the like. In this paper, Professor Peter Horvath and Dr Ralf Sauter present what's wrong with the current approach to budgeting and how to fix it.


iXBRL: Taking stock. Looking forward

In this white paper CCH provide checklists to help accountants and finance professionals both in practice and in business examine these issues and make plans. Also includes a case study of a large commercial organisation working through the first year of mandatory iXBRL filing.