Solvency-Tests – an Alternative to the Rules for Capital-maintenance

  • Josef Arminger (Redner*in)

Aktivität: Gespräch oder VortragVortrag


Creditor protection in the European Union (EU) is based on the principle of capital maintenance within the balance sheet in accordance with the Second Company Law Directive issued in 1976. Developments in financial reporting, especially the trends to-wards internationalization in connection with the adoption of International Financial Reporting Standards (IFRS), have a major impact on the current principles of capital maintenance. Accounting law in the EU is based on the Fourth Council Directive which allows a wide range of accounting options leading to a different basis for distributions to shareholders. As a consequence creditor protection may be endangered. As a conse-quence the European Commission has initiated projects with the aim to modernize company law. Solvency tests are seen as a possible alternative to the existing principles of capital maintenance.This contribution provides an overview of the current rules within the EU to limit distributions to shareholders. On the other hand, a critical analysis of both systems, as well as an overview of current developments, shows a need for political action.
Zeitraum20 Nov. 2013
EreignistitelThe 13th FRAP - Finance, Risk and Accounting Perspectives conference
OrtCambridge, Großbritannien/Vereinigtes KönigreichAuf Karte anzeigen