In response to rising levels of inflation across the globe, the EU has implemented the European Union (Adjustments of Size Criteria for Certain Companies and Groups) Regulations 2024, requiring all member states to increase the thresholds for company sizes by circa 25%. These regulations were signed into Irish law on 19th June 2024 and take effect from 1st July 2024. These regulations amend the Companies Act 2014.
Broadened Eligibility for Exemptions Under the New Regulations
The changes brought about by the regulations broaden the eligibility for companies to benefit from certain exemptions. These include audit exemption and the option to submit abridged financial statements to the Companies Registration Office (CRO) under the micro and small companies’ regime.
Implications for Financial Reporting and Filing
These changes will allow a greater number of companies to classify themselves as micro and small. This in which allows them to enjoy the advantages of simpler accounting requirements and fewer disclosure obligations. It is also possible that some companies currently considered ‘medium-sized’ could reclassify as small companies. This will make them eligible for the aforementioned accounting and CRO filing exemptions. These modifications will apply to financial years starting on or after 1st January 2024, so can be availed of immediately. Under the legislation, companies with a 2023 year end can also opt to apply the new thresholds when preparing their year end accounts.
The changes increase the turnover and balance sheet thresholds of micro, small, and medium companies. However, it is important to note that the employee threshold remains unchanged. This is an important change for Directors, Company Secretaries, Accountants and other CRO filing agents as it is vital information for the preparation of the year-end financial statements and the B1 form.
Company Size Thresholds as of 1st July 2024:
| Micro | Small | Medium | |
| Turnover | €900k (previously €700k) | €15m (previously €12m) | €50m (previously €40m) |
| Balance Sheet | €450k (previously €350k) | €7.5m (increased from €6m) | €25m (previously €20m) |
| Employees | 10 | 50 | 250 |
Turnover exceeding €50,000,000 is considered a large company. If the company satisfies any two of the above criteria, it will be fall under that size category.
Courtesyhttps://https://www.companyformations.ie