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EU Parliament and Council Regulation on Consolidated Financial Statements

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Transparency and Accountability in Financial Reporting

Brussels, Belgium - The European Union has introduced a new regulation aimed at ensuring transparency and accountability in the financial reporting of public-interest companies.

New Requirements for Large Corporations

The EU Parliament and Council Regulation on consolidated financial statements comes into effect today, requiring large corporations to publish detailed financial reports that provide insight into their business activities. According to the regulation, public-interest companies with annual net sales exceeding 300 million euros or employing more than 50 people must prepare consolidated financial statements that comply with International Financial Reporting Standards (IFRS).

Who is Affected?

The new rule applies to companies operating in Hungary and other EU member states.

Key Features of the Regulation

  • Consolidated financial statements must be prepared by public-interest companies with annual net sales exceeding 300 million euros or employing more than 50 people.
  • Financial reports must comply with International Financial Reporting Standards (IFRS).
  • Auditors must be members of the Hungarian Chamber of Auditors or have an audit license issued by the authority.
  • The Authority for Public Oversight of Statutory Auditors will monitor the activities of auditors and ensure compliance with the new rules.

Benefits

The introduction of the consolidated financial statements regulation is expected to enhance investor confidence in the EU’s capital markets, promote transparency, and improve corporate governance practices.

Reaction from Industry Experts

  • “Today’s regulation is a significant step forward in promoting transparency and accountability in the financial reporting of public-interest companies,” said Dr. István Gyöngyösi, Director General of the Hungarian Chamber of Auditors.
  • “The introduction of consolidated financial statements is a major development for the EU’s capital markets,” added András Kiss, CEO of the Budapest Stock Exchange. “We expect this regulation to improve transparency and increase investor trust in our market.”

Effective Date

The EU Parliament and Council Regulation on consolidated financial statements comes into effect today, January 1, [Year].