The Seventh Directive - Practical Implications for the United Kingdom

Article Abstract:

The Seventh Directive of the European Economic Community (EEC) has many complicated articles. Most of the provisions will have little effect on the United Kingdom as they worked hard to have their provisions included. One of the major differences is that they will require equity accounting for associated companies in consolidated accounts which is unfamiliar in the United Kingdom. The Directive does not have to be enacted until 1988, so there is time to update standards to fall in line. There is a difference in definition of groups. The requirements of the Directive are compatible, in most respects, with British acounting standards in that: 1) it recognizes the concept of fair value accounting on the acquisition of a subsidiary, 2) it permits consolidation goodwill to be written off or amortized, 3) merger accounting is recognized and 4) the possibility of negative goodwill in bargain purchase or in anticipation of losses is recognized.

European Economic Community

---

The Seventh Directive: Some First Impressions

Article Abstract:

Consolidation accounting is the subject of the Seventh Directive on Consolidated Accounts as adopted by the EEC Council of Ministers. It makes some major improvements, but leaves some topics open to discussion. There is flexibility built in for individual member states. It deals with the discussion of parent company versus entity concepts of consolidation, favoring the entity concept, but leaving some options open to the parent company concept. A chart lists differences between the two concepts on five basic points of difference. Proportional consolidation is also seen as a necessary option, but the subject remains controversial. Inter-company profits are dealt with generally according to the entity concept of consolidation, meaning that they are eliminated as the entity concept views consolidation as economic unity. The topic of goodwill on consolidation is also laid out according to the Seventh Directive's suggestions.

---

Monopolies and merger mania

Article Abstract:

The Monopolies Act of 1984 has four parts: studies and enquiries of monopolies, management of registrable accords, the Competition Act 1980, and maintenance of resale price. The anti-monopoly Articles 86 and 85 from the Treaty of Rome also apply to the United Kingdom. A major problem is that governments do not know their future direction in the area of competition.

United Kingdom, Management, Economic aspects, Accounting, Economic policy, Monopolies, Great Britain

Similar abstracts:

• Abstracts: Wall Street's reaction to listing of the northern spotted owl. Growth stock outlook
• Abstracts: The statistical association between Central Bank independence and inflation
• Abstracts: The expectations gap and the Australian accounting profession. The education of accountants - a comment
• Abstracts: New real estate investment vehicle advantageous for qualified plans. HOW TO MINIMIZE THE INCOME TAX IMPACT ON PROPERTY TRANSFERRED FOR SERVICES
• Abstracts: Telemarketing Testing with an Outside Agency. Scripts for Outbound Telemarketing. Customer Service Reps: Are They Outbound Marketing Material?

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.