The Seventh Directive complements these harmonization efforts with requirements on when and how firms must prepare consolidated financial accounts. Both directives effectively prescribe a common set of accounting rules for both consolidated and unconsolidated (or parent-only) financial statements. The directives had to be transformed into national laws by the member states during the late 1980s and early 1990s. As a result, accounting standards across EU member states are fairly similar, though not necessarily equal in every respect. Explicit transformation choices in the directives as well as so-called “soft transformations” lead to remaining differences (., Stolowy and Jeny-Cazavan, 2001).7 Thus, the European setting is unique insofar as it provides substantial.
