Regulatory updates to be considered and discussed

A few topics need to be considered in this year shareholders’ meetings.

First of all the new norm introduced by the annual law for market and competition (Law n. 124/2017) which provides for the obligation to indicate in the Notes to the Financial Statements amounts received by the Public Administration as subsides, grants, engagements and economic advantages of all kinds.

Penalties for failure to comply with these provisions can be significant: the refund of the entire amounts to the issuing entities.

Secondly, it is worth mentioning the ever increasing importance of the correct application of accounting principles for tax purposes (the so-called “derivazione rafforzata” ex art. 83, para. 1 of the Italian Consolidated Act on Income Tax).

The Revenue Office has been analysing this topic on a regular basis in its documents lately.

Its feedbacks are increasingly aimed at providing explanations on how to consider amounts, receivables, revenues, compensations from an accounting point of view (according to OIC and IAS standards), considering that statutory provision are valid also for tax purposes (starting from resolution n. 77/E dated 2017 onwards).

On a final note, a few words on the updates recently introduced by Legislative Decree n. 14/2019, containing the new Code on distressed companies and insolvency.

Pursuant to art. 2086 of the Italian Civil Code, recalled for joint-stock companies by art. 2380-bis of the Italian Civil Code, companies need to set up an organisational, administrative and accounting structure adequate to the nature and size of the company.

These organisational models need to impact on processes, procedures and control systems which companies now need to implement and illustrate when preparing their Financial Statements.

This last issue, together with the previous two, will need to be carefully considered in this year shareholders’ meetings.