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As a result of these amendments, from 1 July 2024 the total balance sheet and turnover thresholds for micro, small, medium and large companies (as well as “groups”) as set out in the Companies Act 2014 (the “2014 Act”) are to be increased by approximately 25% to account for inflation.
These adjustments will widen the scope for companies that can potentially avail of various exemptions such as the audit exemption and/or the entitlement to file abridged as opposed to full financial statements at the Companies Registration Office (“CRO”) for companies falling within the micro and small companies’ regime.
They will also increase the number of companies that will be permitted to prepare financial statements as micro and small companies resulting in those companies benefitting from less onerous accounting requirements and disclosures. These changes are to apply to financial years commencing on or after 1 January 2024.
In view of these changes, some companies that are currently classified as medium companies may qualify as small companies and be entitled to avail of these accounting and CRO filing exemptions.
These changes also result in a number of companies falling outside of the scope for the impending corporate sustainability reporting under the Corporate Sustainability Reporting Directive (“CSRD”) during the initial phasing-in period. The transposition of the CSRD Regulations are expected to be published by the 1st July 2024.
In the second year of phasing-in the CSRD, EU “large” companies will fall into scope for CSRD reporting and be required to report in 2026 on their 2025 results.
Some companies currently classified as large may qualify as medium companies and therefore could fall outside of the scope of CSRD reporting certainly in the initial phasing-in period. A company has to fall outside the criteria for at least two financial years to fall outside the scope of CSRD Reporting.
