The Companies (Accounting) Act 2017

By John Kieran ACMA CPA
Tuesday, 13th June 2017

The Companies (Accounting) Act 2017

As per our recent update The Companies (Accounting) Act 2017 which makes many changes to the Companies Act 2014 came into effect on 9 June 2017.

Some details of the notable changes introduced by the 2017 Act are given below.

Accounting Related Changes
The majority of the Act amends Part 6 of the 2014 Act and its related schedules. These amendments introduce changes to the preparation and governance of financial statements, the audit of Irish companies and the filing of annual returns.

Micro companies
Less burdensome accounting compliance requirements are introduced for smaller companies that qualify as 'micro' companies. The following types of companies cannot qualify as micro companies:

  • an investment company;
  • a financial holding undertaking;
  • a holding company that prepares group financial statements; or
  • a subsidiary that is included in the consolidated financial statements of a higher holding undertaking.

Disclosures in financial statements
Micro and small sized companies are exempt from certain disclosures in their financial statements with more extensive disclosure exemptions for micro companies, including an exemption from disclosing details of directors' remuneration.

New thresholds
In addition, there are changes to the criteria for companies to qualify as 'small' and 'medium' sized companies. To qualify for a category, a company must not exceed two of the three thresholds set out in the table below. The new proposed thresholds are a significant increase from the existing thresholds applicable to 'small' and 'medium' companies. For comparison, the existing thresholds are set out in bold in the table below.

Micro

Net turnover €700,000

Balance sheet total €350,000

Employees 10

Small

Net turnover €12,000,000 (€8,800,000)

Balance sheet total €6,00,000 (€4,400,000)

Employees 50

Medium

Net turnover €40,000,000 (€20,000,000)

Balance sheet total €20,000,000 (€10,000,000)

Employees 50

Abridged financial statements and the audit exemption
The 2017 Act removes the exemption available to medium sized companies from filing abridged financial statements. As a result, they must file full financial statements. The revised small company thresholds form the criteria for abridgement of financial statements. These revised small company thresholds also apply when deciding whether a company can avail of the audit exemption.

Relevant financial period
Although the 2017 Act applies to financial years commencing on or after 1 January 2017, it allows certain companies to elect to adopt the new accounting provisions for financial years commencing on or after 1 January 2015.

For more information call John Kieran at 047 84955