The Companies (Accounting) Act 2017 - now in law

The Companies (Accounting) Act 2017 was passed by the Oireachtas and commenced on 9th June 2017.

The Companies Act 2017 has introduced amendments to the Companies Act 2014 and relates to financial statements being prepared for financial periods beginning on or after 1 January 2017. The main amendments are outlined below:

Thresholds

The Act has amended the criteria for companies to qualify as “small”, “medium” and “large” and has also introduced s new regime form smaller companies that qualify as “micro” companies. Amongst other exemptions, micro companies will be exempt from disclosing directors’ remuneration in the financial statements and will also be exempt from preparing a directors’ report.

To qualify, a company must not exceed any two of the three thresholds. It should also be noted that a PLC company cannot qualify as a small or micro company.

Filing obligations

Many changes have also been introduced regarding filing financial statements, these are as follows:

• Abridged financial statements

Only small and micro companies will be permitted to file abridged financial statements.

This is no longer available for medium sized companies.

• Consolidated financial statements

A medium sized company that is a parent company within a group will be required to file consolidated financial statements.

Small and micro sized companies may still elect to prepare consolidated financial statements if they wish.

• Unlimited companies

A much broader range of unlimited companies are required to file their financial statements for periods commencing on or after 1 January 2017. This relates to unlimited companies that through the use of group structures were exempt from publicly filing accounts and financial statements.

A concession has been granted for unlimited holding companies with limited liability subsidiaries and such companies will only be obliged to file for financial years commencing on or after 1 January 2022.

• Section 357 Guarantees

An amendment to section 357 results in subsidiary companies filing consolidated parent company financial statements must have a guarantee from the parent which covers “commitments” entered by the subsidiary as well as “liabilities” as previously outlined in the Companies Act 2014.

• Investment Public Limited Companies (PLC’s)

Part 24 Investment PLC’s are now required to file their financial statements with the CRO.

• Unlimited Company Names

Under the Companies Act 2017 all unlimited companies must have “Unlimited Company” or “UC” at the end of the company name.

Under Companies Act 2014 a company was exempt from this requirement if they received an exemption from the Minister for Jobs, Enterprise and Innovation. Although this exemption is no longer available, any company that has previously obtained such an exemption will remain exempt until the expiry of same.

Contact Caitriona Doyle Manger in OSK Audit for further details on the Companies (Accounting) Act 2017 or in relation to our audit and accounting services or call 01 439 4200.