Companies (Accounting) Bill 2016 – focusing on filing financial statements
The Companies (Accounting) Bill 2016 has completed the second stage of Seanad Éireann with Committee stage expected next week. Thereafter, report and final stages in the Seanad as well as a possible final appearance before the Dáil, should the Seanad make an amendment, will be required prior to enactment.
Proposed changes to the filing of financial statements
This Bill proposes a number of changes in relation to the filing of financial statements, the most significant of which are:
- The size thresholds for companies that qualify as small increases to:
(a) turnover less than €12m (currently €8.8m),
(b) gross assets less than €6m (currently €4.4m),
(c) employees less than 50 (currently 50).
- Abridged financial statements are no longer available for medium size companies.
- A medium sized company that is the ultimate parent of a group will be required to prepare and file consolidated financial statements.
- The Bill will require designated unlimited companies to file financial statements. A ministerial order is expected to clarify when this provision will take effect. There are a number of criteria in determining if an entity is a designated unlimited company, one of which has been deferred until accounting periods commencing on or after 1 January 2022. This condition relates to where an unlimited company is the parent of a limited subsidiary.
This is a very technical piece of legislation and Company Directors will need to consider the Bill carefully once it becomes law.