SME Accounting Rules May Change In Next Couple Of Weeks

New European Directives Could Change Financial Reporting Requirements For Small Businesses.

Annual accounts could be simplified for the smallest companies and financial reporting requirements could be reduced in 5 major areas including: accounting policies; guarantees, commitments, contingencies and arrangements not recognised in the balance sheet; post-balance sheet not recognised in the balance sheet; long-term and secured debts; and related party transactions.

While some analysts argue that simpler reports may discourage creditors from lending and traders from engaging in business transactions, others argue that this will reduce the cost burden on SMEs therefore putting them in a more advantageous position.

It is expected that users of accounts including banks, investors, credit rating agencies, trading partners and tax man will be consulted. The draft directive is expected to be finalized in a few weeks.

For companies or entities currently finding it difficult to produce and effectively use financial and management accounts, please contact us for support by mailing chinwe@efm.uk.com or you may fill the contact form on this site. We will connect you to the relevant finance specialist closest to you.


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