Abstract:

Published financial statements and information are since a long time subject to strict regulations. The disclosing of non-financial information, like sustainability and social responsibility, was flexible and not regulated for a long period as no standards in the European Union (EU) existed. Entities reported on sustainability, economics, environment and social aspects without obligation or specific rules to follow. The lack of conformity of such reports and missing binding character was recognized by the EU and resulted in the EU Directive 2014/95/EU. This Directive includes rules to make non-financial information more harmonized and obligatory within public available reports. Like international accounting standards the new Directive is helpful to harmonize and compare reports to each other. The undertakings concerned by the Directive, in line with EU aims to reduce the burden on SME`s, are the public interest entities with more than 500 employees. Nevertheless the Directive will have an impact on SME´s non-financial reports. EU member States will have to enforce the Directive until December 2016 and the undertakings concerned by the regulation will have to report non-financial information in compliance with the Directive starting from 1 January, 2017.