The Role and Current Status of IFRS in the Completion of National Accounting Rules – Evidence from Portugal

Abstract

We explain the process and documents that internalise the European Union (EU) Directive No. 2013/34 in Portugal. The Portuguese accounting standard setting body, the Comissão de Normalização Contabilística (CNC), is the entity in charge of the preparation and implementation of accounting standards. As such, CNC was responsible for the implementation of the EU Directive in Portugal. The Directive was approved by Decree-Law No. 98/2015 of 2 June 2015, but many important aspects of the Directive had already been adopted in Portugal when a new accounting system, designated Sistema de Normalização Contabilística (SNC), was introduced in 2009. Decree-Law No. 98/2015 of 2 June 2015 amends the SNC system to incorporate news aspects of the 2013 EU Directive. The current accounting rules in Portugal are strongly aligned with IFRS but some differences exist.

Keywords:

• European Union
• IFRS
• SNC
• EU accounting Directive No. 2013/34
• Portugal
• SMEs

ORCID

Helena Isidro http://orcid.org/0000-0001-6030-7264

Cláudio Pais http://orcid.org/0000-0003-2612-9761

Notes

1 The Portuguese Parliament consists of a single Chamber known as the Assembly of the Republic.

2 The first Portuguese accounting rules were issued in 1977 by Decree-Law No. 47/77 of 7 February. This set of rules called Plano Oficial de Contabilidade (POC) – Official Accounting Plan – included accounting principles, reporting rules, a list of accounts, and formats for the financial statements. POC was amended in 1989 and 1993 to incorporate the Fourth and Seventh EU directives (Decree-Law No. 410/89 of 21 November and Decree-Law 238/91, of 2 July, respectively).

3 The formats of the financial statements, the codes and the names of the accounts closely follow those of the previous accounting system (POC) which was based on the Fourth and Seventh EU Directives. The resemblance with the formats of the old system facilitated the transition to SNC particularly for small companies.