Accounting Standards for Equity Capital Management and Dividend Distributions in France
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Anne Le Manh
Abstract
This paper aims to outline the current regulatory framework of accounting for dividend distributions in France, with a view over its evolution since 1957. After briefly presenting the accounting regulatory sources of dividend distribution in France, our case study focuses on the dividend distribution restrictions that originate from two main matters, as in most EU member states:
– Recognition of unrealised gains in the financial statements.
– Carrying out of capital transactions impacting company equity: increase in capital, share buy-back, merger and acquisitions.
Two findings are especially noteworthy. First, French regulations require restrictions on dividend distribution for the optional accounting treatments mentioned by the 2013 EU Accounting Directive and for which this directive recommends Member States to require those restrictions. Furthermore, in line with EU regulations, French regulations are silent on the distribution of dividends from unrealised profits or reserves arising from the recognition of goodwill in the individual accounts, the recognition of a deferred tax asset and the recognition of a share premium.
Primary sources
Code de Commerce (CC, French Commerce Act, last amended on 12.2023) EEC, Second Directive77/91/EEC, 1976.Search in Google Scholar
EEC, Fourth Directive 78/660/EEC, 1978.Search in Google Scholar
EU, Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013.Search in Google Scholar
EU, Directive (EU) 2017/1132 of the European Parliament and of the Council of 14 June 2017 relating to certain aspects of company law.Search in Google Scholar
EU, Regulation (EC) No 1606/2002 of the European Parliament and of the Council of 19 July 2002 on the application of international accounting standards.Search in Google Scholar
Plan Comptable General (French General Accounting Plan, last amended on 01.2019).Search in Google Scholar
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Articles in the same Issue
- Frontmatter
- Research Articles
- ELI Guidance on Company Capital and Financial Accounting for Corporate Sustainability: A Foreword
- The Historical Evolution of Corporate Social Responsibility: A Foreword to the ELI Guidance
- Introduction to “Better Company Law for Sustainable Business Conduct: ELI Guidance on Company Capital and Financial Accounting for Corporate Sustainability”
- ELI Guidance on Company Capital and Financial Accounting for Corporate Sustainability
- The Effects of Applying the ELI Recommendations for Corporate Sustainability: Illustrative Examples
- Financial Sustainability of the Company and the Principle of Share Capital Maintenance
- Accounting Policies and Dividend Limitation: A European Comparison
- Important Features of Capital Maintenance in Germany
- Financial Reporting and the Determination of Distributable Profits: A Broken Link. The Case of Italy
- Accounting Standards for Equity Capital Management and Dividend Distributions in France
- Financial Statements and the Determination of Distributable Profits in Croatia
- Shareholders’ Equity and Dividend Regulation in Japan: How Can Financial Reporting and Capital Maintenance Be Reconciled?
Articles in the same Issue
- Frontmatter
- Research Articles
- ELI Guidance on Company Capital and Financial Accounting for Corporate Sustainability: A Foreword
- The Historical Evolution of Corporate Social Responsibility: A Foreword to the ELI Guidance
- Introduction to “Better Company Law for Sustainable Business Conduct: ELI Guidance on Company Capital and Financial Accounting for Corporate Sustainability”
- ELI Guidance on Company Capital and Financial Accounting for Corporate Sustainability
- The Effects of Applying the ELI Recommendations for Corporate Sustainability: Illustrative Examples
- Financial Sustainability of the Company and the Principle of Share Capital Maintenance
- Accounting Policies and Dividend Limitation: A European Comparison
- Important Features of Capital Maintenance in Germany
- Financial Reporting and the Determination of Distributable Profits: A Broken Link. The Case of Italy
- Accounting Standards for Equity Capital Management and Dividend Distributions in France
- Financial Statements and the Determination of Distributable Profits in Croatia
- Shareholders’ Equity and Dividend Regulation in Japan: How Can Financial Reporting and Capital Maintenance Be Reconciled?
