Welcome to the "Accounting and Statistics" web-site of Eurostat.

The website is mainly for statisticians and aims at:

• providing information and documentation on the impact on European official statistics of expected changes in business accounting law and practice, as well
• promoting discussion on the possible developments of relations between business accounting and statistics.

The conclusions of the European Council in Lisbon in March 2000 led to the accelerated completion of the Single Market for Financial Services. A priority objective identified was the creation of common financial reporting standards.

The EU Commission’s "EU Financial Reporting Strategy: the way forward" (June 2000) characterised these standards as "transparent, fully understood, properly audited and effectively enforced" and concluded that the International Accounting Standards (IAS) issued by the International Accounting Standards Board would become the EU-wide accounting system that the logic of the Single Market demands.

Within this context, several legal acts were adopted in the following years, the most relevant being the Council Regulation (1606/2002) "Application of International Accounting Standards". The IAS Regulation requires publicly traded companies to apply International Accounting Standards for the preparation of their consolidated financial statements, at the latest by 2005. Member States (MS) are left the options to permit or require:

• publicly traded companies to prepare non-consolidated accounts in conformity with IAS

• other companies to prepare their consolidated and/or non-consolidated accounts in conformity with IAS.

The introduction of IAS will affect several areas of official statistics: structural business statistics, national accounts, financial accounts, balance of payments, money and banking statistics being the most relevant. Other important areas include agriculture, environment, energy, information society, and innovation. All statistics related to economic activities of enterprises are involved.

Therefore in 2000, Eurostat has initiated work on Accounting and Statistics with four main aims:

1. To make sure that Eurostat and the European Statistical System (ESS) are prepared to handle any changes in EU statistics arising from the introduction of International Accounting Standards for EU listed companies in 2005, and associated changes in EU Accounting law.

2. To make sure that Eurostat and NSIs take the opportunities offered by the changes in EU accounting rules in order to promote the exploitation of administrative accounting sources wherever this is feasible, thus reducing the reporting requirements for enterprises.

3. To monitor future accounting developments (particularly new or amended IAS) and give early warning of changes likely to impact on EU statistics.

4. To make sure that ESS statisticians use all available opportunities to influence future accounting changes to promote the interests of EU statistics.

In working to meet these aims, Eurostat :

• convenes a Task Force to discuss accounting issues and formulate future plans ;

• maintains an "Accounting and Statistics" Focal Point group to coordinate work within Eurostat ;

• ensures close liaison with Internal Market DG on current developments in accounting standards and allied legislation ;

• engages in fact finding surveys with Member States :

• cooperates with the European Central Bank (ECB) via a joint Steering Committee, established with the task of coordinating a strategy on issues related to Accounting and Statistics.

At the moment, it is very difficult to provide an assessment of the impact of EU accounting changes on European official statistics. The two main difficulties are:

1. The different national accounting traditions and the extent to which existing national business accounting practices already apply IAS or a similar set of standards.

2. The current links between accounting and statistics, which differ greatly between countries and statistical fields i.a. Structural Business Statistics (SBS), NA, FA, MBS and BOP.

1. Regarding accounting issues, it is important to note that there is a great degree of uncertainty at different levels, such as:

• The ongoing process of revision and updating of the IAS by the International Accounting Standard Board.

• The use of the options left by the Regulation to MSs on possible extensions to non-consolidated accounts and type of companies, which are not yet known. From investigations conducted so far it is known that throughout the enlarged EU, 13 MSs will permit or require the application of IAS to all companies. Three member states on the other hand will for the time being not allow IAS for individual accounts of non-listed companies (Austria,  France and Spain).  An overview table of the extension of IAS throughout the MS of the EEA can be found in paragraph 5.2 in the Accounting section of this website.

• The possibilities left to some companies by national options.

2. The following sources have been recognised as main links between official statistics and business accounting:

Summarising : the implementation of IAS will have an impact on statistics, even if at the moment this impact is not precisely measurable. It will vary across countries, statistical areas, types of companies and time. The increasing awareness and co-ordination of efforts at various levels will provide more precise information in the near future.

At the European level and for some statistical domains, explicit links exist between business accounting data and statistics (e.g. structural business statistics and money and banking statistics). These statistics will be sensitive to changes in accounting rules, with the following possible consequences:

• Loss of comparability between listed and non-listed companies, as they could be subject to different accounting rules.

• Breaks in time series.

During the various meetings and exchanges of opinions, some member states expressed their concerns on other possible consequences at national level.

As a remedy, double reporting could be asked by statistical institutions, which increases the burden for respondents.

At the same time, it emerges that the harmonisation of business accounting rules could represent an important opportunity for statisticians if :

a) the company accounts become a generalised statistical source. An action in this way was undertaken in the Structural Business Statistics regulation, where a great effort was made to develop the principle of "accounting linkage", in the sense that the majority of the statistical variables could be measured or approximated by business accounting data covered in the 4th directive; similar efforts could be envisaged for other statistical domains.

b) the business accounts are presented according to a common standardised format (electronic with standard reporting language). From this point of view, the use of XBRL (eXtensible Business Reporting Language, an XML-based open standard for accounting reporting)  is likely to become important to future work in the field of accounting and statistics. The IASB and XBRL international (a non-profit consortium of over 250 companies which develops XBRL) have developed a comprehensive IAS-XBRL taxonomy that models the primary financial statements to be used by commercial and industrial entities.

If these conditions were satisfied, official statistics could gain on two important aspects :

• Increased quality of statistics (reliability, comparability, timeliness)

• Reduction in reporting burden for the respondents.

• Different statistical domains are concerned (Structural Business Statistics, National Accounts, Balance of Payments Statistics, Financial Accounts, Money and Banking Statistics being the most relevant).

• The link between accounting and statistics varies across countries and follows different paths.

• The options left to the countries by the IAS Regulation will probably create disparities of implementation.

• The key roles are played by several central bodies like the International Accounting Standards Board (IASB), the Accounting Regulatory Committee (ARC), the Committee on Monetary, Financial and Balance of Payments Statistics (CMFB)  and the European Financial Reporting Advisory Group (EFRAG).

Therefore, Eurostat distinguishes the next activities into two strands: coordination activities and decentralised activities.

A central co-ordination role for the whole ESS is needed and should be played by Eurostat. This role covers:

• Raising awareness in Member States, stimulating work and identifying the main areas for action both within the MS and at European level.

• Channelling information to interested parties, through the continuous update of the "Accounting and Statistics" website and offering support to Working Parties in terms of information, papers, presentations, and links to accounting experts.

• Reinforcing contacts with relevant Commission Services and other international accounting bodies. Making representations where necessary on behalf of the ESS.

• Establishing an active coordination with the ECB on subjects of common interest. The CMFB Executive Body decided in October 2002 that ECB should focus on money and banking statistics, meanwhile Eurostat will concentrate more on Business Statistics, Financial Accounts, National Accounts and Balance of Payments. For Balance of Payment statistics, co-ordination with ECB is particularly important, as in the field of Foreign Direct Investments the responsibility is shared between Eurostat and ECB. Actions are co-ordinated through the joint participation to Working Groups and Task Forces, and the Eurostat-ECB « Accounting and Statistics Steering Group ».

• Following-up with computer science experts on the work on XBRL.  A feasibility study is currently being carried out by PWC into extracting economic statistical data from XBRL-reports produced by accounting software packages.  Results are being expected by the end of September 2004. 

• Studying new opportunities for official statistics, even in the long term. In particular, the drafting of new statistical legal acts to try to exploit possibilities offered by IAS.

• Carrying forward the debate (involving the CMFB, EFRAG, Task Force, CBSO, the competent Commission DGs ) on what statisticians can ask regarding future changes in IAS.

• Investigating broader international aspects: the IASB and accounting authorities in Japan and US are working on a convergence project. The OECD and the UN/Economic Commission for Europe have an interest in this work and will be approached.

Member States are requested to carry out individual studies on the national implementation of IAS and the consequent impact on their statistical systems. Within this context, it is necessary to conduct an analysis of how business accounting is related to the information requested at the Community level for the various domains.