Free Accounting Dissertations - The Eec Regulation Known As 4th Directive On Company Law Harmonization
The EEC regulation known as 4th directive on Company Law Harmonization brought the 1982 PCG. This was followed by 7th EEC Directive compelling the EEC companies to prepare their consolidated accounts under the set of rules laid in the 7th Directive. The French government introduced a new chapter to the 1982 PCG to accommodate the new rule in the French accounting rules.
The new PCG assembles chart into 9 groups. The first digit in the code identifies the group. The second digit is for the ledger framework while three more digits complete the code for other heads within the main category. The accounting heads are [Roberts, 2003]:
Equity, provisions and non-current liabilities
Non-current assets
Inventories
Personal accounts
Financial accounts
Expenses
Revenues
Special accounts (optional)
Management accounts (optional)
The new PCG complies with the EEC directives. The French financial accounting and reporting system has been able to move with the requirements of times and it is certain that parts of this convenient chart accounting system, which are also common with the US Generally Acceptable Accounting Procedures (GAAP) will be incorporated in the International Accounting Standard.
Although both UK and France are now following the new EEC directives there are still significant differences in the French and British financial accounting and reporting system. [Jones & Samar-Fauchon, 2001] have carried out a detailed analysis of the main differences between the UK and French accounting practices. They point out that the differences in accounts consolidation, associated and joint ventures accounting, accounting for business combination, tangible and intangibles assets accounting, income tax, employee benefit accounting and capital and shares accounting were still substantially apart. The IASC and EEC have to do substantial work to have a system, which can be broadly similar to achieve their aim of harmonization of accounting practices.
Conclusions
International accounting systems differ a lot from each other. French financial accounting and reporting system has evolved over the last three hundred years. The origin of the present chart based form can be traced to 1927. The system has evolved over the years resulting in French system becoming one of the most powerful and useful accounting systems in the world.
The global economy is favoring a uniform financial accounting and reporting system. France being a member of EEC is leading the drive to harmonize accounting standards initially within EEC and as future target help in evolving an international accounting system.
Bibliography
Doost, R. K., and Ligon, K.M., Management Accounting, October 1986; retrieved from Internet on Oct 27, 2005, http://college.hmco.com/accounting/resources/students/readings/38-doost.html
Jones, C. and Samar-Fauchon. M.
Dissertations - Free Accounting Dissertations
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