The Companies (Accounting) Bill 2016 – An Overview

The Companies (Accounting) Bill 2016 is scheduled for report stage in the Dáil in March 2017.

The Bill will introduce a regime for small companies and micro companies.

The Small Company Regime

The small company regime will allow companies to apply Section 1A of FRS 102, The Financial Reporting Standard Applicable in the UK and Republic of Ireland, to their financial statements.

The main features of this bill include:

• The proposal to increase the Small and Medium Company Threshold to EU maximum levels as follows (a company must meet two out of the following three criteria):

• Medium sized companies will be required to file full financial statements.
• An exemption for small companies from the requirement to prepare a cash flow statement.
• Exemption from certain disclosures in Small Company financial statements.
• Extended scope of the obligation to file financial statement for designated unlimited companies. When the bill is enacted, a number of existing groups which have Irish incorporated unlimited companies may have to file financial statements in the Companies Registration Office.

The Micro Company Regime

The Micro Companies Regime will allow companies to prepare financial statements under FRS 105, The Financial Reporting Standard Applicable to the Micro-Entities Regime.

A company will qualify for the Micro Companies Regime if it meets two out of the following three criteria:             

The main features of the Micro Companies Regime are:

• There is no requirement for a company to apply FRS 105, they have the choice to apply Section 1A or the full FRS 102.
• FRS 105 cannot be availed where consolidated accounts are prepared.
• FRS 105 cannot be a applied to a holding company that does not meet the conditions of a small group.
• No transition disclosure from previous GAAP.
• Minimum financial statement disclosures. The following are examples of some of the disclosures that are not required in the financial statements (if the company decides to disclose they must be in line with the requirements of the small company regime):
  • Directors Report
  • Directors Remuneration
  • Total wages and salaries or average number of employees
  • Details of investments held

It is important to note that until such time as the Bill in enacted and commenced, the existing Companies Act 2014 disclosures apply to all applicable companies (irrespective of size). 

Contact Caitriona Doyle Manger in OSK Audit for further details on the Companies (Accounting) Bill 2016 or in relation to our audit and accounting services or call 01 439 4200.