European Business Law, the fourth volume in our series, shows how the European authorities simultaneously abolish all restrictions on access to and exercise of economic activities and support the growth of domestic markets, through the harmonization the internal legislation or the enactment of genuinely unified regulations.

European Business Law

The Seventh Companies Directive No 83/349 , replaced by Directive No 2013/34 , coordinates the legislation of the Member States governing consolidated accounts. The consolidation is required where, in accordance with Article 22(1), an undertaking (a parent undertaking): 
- a) has a majority of the shareholders' or members' voting rights in another undertaking (a subsidiary undertaking); or 
- b) h …

Consolidated accounts

The Seventh Companies Directive No 83/349 , replaced by Directive No 2013/34 , coordinates the legislation of the Member States governing consolidated accounts. The consolidation is required where, in accordance with Article 22(1), an undertaking (a parent undertaking): 

- a) has a majority of the shareholders' or members' voting rights in another undertaking (a subsidiary undertaking); or 

- b) has the right to appoint or remove a majority of the members of the administrative, management or supervisory body of another undertaking (a subsidiary undertaking) and is at the same time a shareholder in or member of that undertaking; or 

- c) has the right to exercise a dominant influence over an undertaking (a subsidiary undertaking) of which it is a shareholder or member, pursuant to a contract entered into with that undertaking or to a provision in its memorandum or articles of association; or 

- d) is a shareholder in or member of an undertaking, and: i) a majority of the members of the administrative, management or supervisory bodies of that undertaking (a subsidiary undertaking) who have held office during the financial year, during the preceding financial year and up to the time when the consolidated accounts are drawn up, have been appointed solely as a result of the exercise of its voting rights; or ii) controls alone, pursuant to an agreement with other shareholders or members of that undertaking (a subsidiary undertaking), a majority of shareholders' or members' voting rights in that undertaking. 

Furthermore, the Member States may require any undertaking governed by their national law to draw-up consolidated accounts and a consolidated annual report if the parent undertaking holds a participating interest in another undertaking and it actually exerts a dominant influence over it or that it or the subsidiary undertaking are managed on a unified basis by the parent undertaking. Regardless of where the registered offices of the subsidiaries are situated, the parent undertaking and all of its subsidiary undertakings shall be undertakings to be consolidated (Article 22(6)) . The obligation to consolidate is however required only if the parent undertakings or several of its subsidiaries are capital companies within the meaning of Article 21 of the directive. Groups that do not exceed thresholds set by the directive or those formed of subsidiaries which are not material, both individually and collectively (Article 6(1)(j)), may also be exempted from the obligation to consolidate.

As for annual accounts, the consolidated accounts comprise the consolidated balance sheet, the consolidated profit-and-loss account and the notes on the accounts and must comply with the principle of true and fair view (Article 4). They also go along a consolidated annual report which must include a fair review of the development of the business, the results and the position of all the undertakings included in the consolidation, as well as an indication of the main risks and uncertainties which they have to face (Article 19(1)). These accounts are audited by one or more persons authorized to audit accounts under the laws of the Member State which govern the parent undertaking. These persons must also give an opinion on whether the consolidated annual report is consistent with the consolidated accounts for the same financial year . Pursuant to Article 30 of the directive, duly approved consolidated accounts, and the consolidated annual report, together with the opinion submitted by the person responsible for auditing the consolidated accounts, are published according to the terms and conditions provided for in Article 16 of Directive No 2017/1132.

Directive No 83/349/EEC of 13 June 1983 based on Article 54 (3) (g) of the Treaty on consolidated accounts, OJ L 193 of 18.7.1983, 1.

Directive No 2013/34/EU of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertaking, OJ L 182 of 26 June 2013.

For such purposes, any subsidiary of a subsidiary undertaking shall be considered a subsidiary undertaking of the parent undertaking which is the parent of the undertakings to be consolidated.

European Business Law

198. Consolidated accounts

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Les notions juridiques connexes

198. Consolidated accounts

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Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise