European Perspective on the integration of accounting

Federico Diomeda – EFAA CEO

SKwP Conference

The Role of Accounting in EU integration

Warsaw 29 November 2011

European Federation of Accountants & Auditors for SMEs

14 Members throughout Europe Members of the members: SMPs for SMEs Precise focus on SMPs/SME issues All inclusive and accessible structure

made up of SMPs Represent SMPs for SMEs worldwide

interests (legislators, standard-setters and stakeholders)

Promote the SMP for SME profile as a tool for business development

Accounting in Europe

Short historical background Update on recent accounting initiatives EFAA vision

From Genesis to Revolution and key questions

Current legislative position in EuropeWhy accounting developments?Are developments too many to manage safely?Why is “simplification” a potential bias for

good reforms?

Accounting in Europe after the IASB IFRS for SMEs publicationSceptical appreciation of IFRS for SMEs in many

countriesCall for the Directives still encompassing

Member State limited options to improve harmonisation

Discussion on fundamental principles for good accounting

Effects of “simplification” still impacting on the reform process

The Commission’s ideas about a new Directive on accounting and the Micro Entities proposalSlight change in focus in the preamblesSplitting the Companies by size and leaving the Micros

under a special regime under autonomous definitionRevised fundamental principles with introduction of

materiality and “substance over form”Bottom up approach for disclosure (small – medium –

large) Abridged accounts still allowedLimited Member State options to enable harmonisationAbsence of a general framework

The EFAA vision and positionNew proposals and accompanying impact

assessment still to be fully studied EFAA position statement May 2011 not conflicting EFAA stress importance of good accounting for

stewardshipEFAA calling for relevance of information delivered

rather than “simplification”EFAA believing that the minimum content of the

reports should include a cash flow statementEFAA considers that fair value accounting should be

limited to instances where a current market exists

THANK YOUAny questions?

EFAA: THE BIG VOICE FOR SMALL BUSINESS

www.efaa.com