Opposition to the proposal at last week’s meeting of EU finance ministers, resulted in it being scrapped. In its place, interim management statements between half-year and annual results will be introduced.
These statements will include a description of the financial position and the impact of material events on that financial position, but they will not have to include actual results. Companies that already report on a quarterly basis will be exempt from this.
Under the co-decision procedure, the changes suggested by the council of ministers still need to be approved by the European parliament. But this should not cause too many problems, with a previous parliamentary report also suggesting that quarterly reporting be made optional for member states. The move is a victory for a number of UK bodies that have been lobbying for changes to the directive. Although the precise nature of the reports is still to be defined, representatives of the accountancy profession are happy with the direction the directive is heading in. ‘This compromise should be welcomed and the new proposals continue to be worked on,’ said Nigel Sleigh-Johnson, head of financial reporting at the ICAEW. ‘It strikes a balance between transparency and reasonable reporting requirements.’ While the directive provides a minimum level of reporting on a quarterly basis, nations would still be able to impose more stringent requirements. The UK is unlikely to do so just yet, but this could change in the future. ‘If those nations with quarterly reporting requirements are attracting more companies and investment, then we could see more countries moving in that direction,’ said Tom Troubridge, head of capital markets at PricewaterhouseCoopers.
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