Financial Statement Layout

This chapter examines the financial reporting requirements and presentation formats for annual financial statements in various European jurisdictions. The study focuses on the implementation of EU Directive 34/2013, which introduced different categories of undertakings and financial reporting requirements tailored to the size of the entities. The accounting directive mandates that annual financial statements for all undertakings include, at a minimum, the balance sheet, profit and loss account, and notes to the financial statements. Regarding the balance sheet and profit and loss account presentation, the directive offers two alternative formats for each. Member States can choose one format or allow companies to adopt either. The examination of the various choices made by different EU countries reveals varying approaches among jurisdictions. The impact of these financial reporting practices can also affect the comparability between International Financial Reporting Standards (IFRS) and local accounting standards. The lack of comprehensive income reporting in national practices risks widening the gap between those two regulatory frameworks.