include the Corporate Governance Report. Certain large enterprises and public interest
entities operating in the extractive industry or engaged in logging in pristine forests are
required to draw up a Payment Report for the benefit of Governments if the payment
or its series exceeds EUR 100,000 per year [9].
The EU directives define general requirements for the composition, content and
presentation of financial statements, but there are many differences in the measurement
and disclosure in the annual financial statements of the companies and consolidated
financial statements. The legislation of Belgium, Denmark, Finland, Greece, Ireland,
Portugal, Spain, Sweden and the United Kingdom requires the compilation and
submission of other annual reports that are not included in the scope of the Fourth EU
Directive:
- Cash Flow Statement (Denmark, Finland, Ireland, Portugal, Sweden, United
Kingdom);
- Statement of total recognized profit and loss (Ireland, United Kingdom);
- Reconciliation with gains and losses on historic cost (Ireland);
- Report on sources and use of funds (Spain);
- Profit sharing report (Greece);
- Social report (Belgium).
The main requirement for EU financial reporting is true and fair coverage of the
financial position of the companies and the financial results of their activities [8, p. 85].
Legislation of the countries of the world requires the application of uniform principles
for the valuation of articles of financial statements: the assumption of continuous
activity; sequence of application of assessment methods; the reporting of income and
expenses of the reporting period irrespective of the date of receipt or expenditure of
funds related to these incomes and expenses; separate estimation of articles of assets
and liabilities; evaluation based on prudence; the balance at the beginning of the fiscal
year should correspond with the balance at the end of the previous year.
In accordance with the provisions of the Directive 2013/34/EU [9], the Law of
Ukraine "On Accounting and Financial Reporting in Ukraine" was amended and, and
from 01.01.2018, the classification of enterprises for the purposes of accounting and
financial reporting was changed [10]. This division of enterprises is in line with the
European classification, which provides comparisons of financial statements of
companies from different countries.
Consequently, the classification of enterprises, in accordance with Law of
Ukraine No. 2164 and Directive 2013/34/EU, provides three criteria for assessing the
size of an enterprise: book value of assets, net income from sales of products (goods,
works, services) and average number of employees [10]. The book value of assets is
displayed at line 1300. № 1 "Balance sheet (Statement of financial position)", f. No. 1-
m or f. № 1-ms "Balance". Net income from the sale of products (goods, works,
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