Companies (Accounting) Act 2017

Qualification of company based on size of company

15. The Principal Act is amended, in Part 6, by the insertion of the following Chapter after Chapter 1:

“CHAPTER 1A

Qualification of company based on size of company

Qualification of company as small company: general

280A. (1) A company that is not excluded by subsection (4) qualifies as a small company in relation to its first financial year if the qualifying conditions are satisfied in respect of that year.

(2) A company that is not excluded by subsection (4) qualifies as a small company in relation to a subsequent financial year (in this subsection referred to as 'relevant year') if the qualifying conditions—

(a) are satisfied in respect of the relevant year and the financial year immediately preceding the relevant year,

(b) are satisfied in respect of the relevant year and the company qualified as a small company in relation to the financial year immediately preceding the relevant year, or

(c) were satisfied in the financial year immediately preceding the relevant year and the company qualified as a small company in relation to that preceding financial year.

(3) The qualifying conditions for a small company are satisfied by a company if, in relation to a financial year, it fulfils 2 or more of the following requirements:

(a) the amount of turnover of the company does not exceed €12 million;

(b) the balance sheet total of the company does not exceed €6 million;

(c) the average number of employees does not exceed 50.

(4) This section shall not apply to a company if it is—

(a) a holding company, or

(b) an ineligible company.

(5) In the application of this section to any period which is a financial year but is not in fact a year, the amount specified in subsection (3)(a) shall be proportionately adjusted.

(6) For the purposes of subsection (3)(c), the average number of employees of a company shall be determined by applying the methods specified in section 317 for determining the number required by subsection (1)(a) of that section to be stated in a note to the financial statements of a company.

(7) In this section, ‘qualifying conditions’ mean the requirements specified in subsection (3).

Qualification of company as small company: holding company

280B. (1) A holding company qualifies as a small company in relation to a financial year only if the group, in respect of which it is the holding company, qualifies as a small group in relation to that same financial year.

(2) A group that is not excluded by subsection (5) qualifies as a small group in relation to the first financial year of the holding company if the qualifying conditions are satisfied in respect of that year.

(3) A group that is not excluded by subsection (5) qualifies as a small group in relation to a subsequent financial year (in this subsection referred to as 'relevant year') of the holding company if the qualifying conditions—

(a) are satisfied in respect of the relevant year and the financial year immediately preceding the relevant year,

(b) are satisfied in respect of the relevant year and the group qualified as a small group in relation to the financial year immediately preceding the relevant year, or

(c) were satisfied in the financial year immediately preceding the relevant year and the group qualified as a small group in relation to that preceding financial year.

(4) The qualifying conditions for a small group are satisfied by a group if, in relation to a financial year, it fulfils 2 or more of the following requirements:

(a) the aggregate amount of turnover of the group does not exceed €12 million net (or €14.4 million gross);

(b) the aggregate balance sheet total of the group does not exceed €6 million net (or €7.2 million gross);

(c) the aggregate average number of employees of the group does not exceed 50.

(5) This section shall not apply to a holding company of a group if any member of the group is an ineligible entity.

(6) In the application of this section to any period which is a financial year but is not in fact a year, the amounts specified in subsection (4)(a) shall be proportionally adjusted.

(7) The aggregate figures referred to in subsection (4) shall be ascertained by aggregating the equivalent figures determined in accordance with section 280A for each member of the group.

(8) Where a group proposes to satisfy the qualifying conditions referred to in subsection (4) on the basis of the requirements of paragraphs (a) and (b) of that subsection, it may do so on the basis of either the net figures or the gross figures respectively for both of the said paragraphs.

(9) The figures for each subsidiary undertaking shall be those included in its entity financial statements for the relevant financial year—

(a) if its financial year ends with that of the holding company, that financial year, and

(b) if not, its financial year ending last before the end of the financial year of the holding company.

(10) In this section—

‘first financial year of a holding company’ means the first financial year at the end of which the company qualifies as a holding company by virtue of having one or more subsidiaries;

‘qualifying conditions’ mean the requirements referred to in subsection (4).

(11) For the purposes of this section, in relation to the aggregate figures for turnover and balance sheet total—

‘net’ means after set-offs and other adjustments made to eliminate group transactions—

(i) in the case of Companies Act financial statements, in accordance with Schedule 4, and

(ii) in the case of IFRS financial statements, in accordance with international financial reporting standards;

‘gross’ means without those set-offs and other adjustments.

Small companies regime

280C. Where a company qualifies as a small company in accordance with section 280A or 280B, as may be appropriate, then, as provided in this Part, different rules may be applied (in this Act referred to as the ‘small companies regime’) to the company in respect of financial statements and reports for a financial year in relation to which that company so qualifies as a small company.

Qualification of company as micro company

280D. (1) A company that is not excluded by subsection (4) qualifies as a micro company in relation to its first financial year if the qualifying conditions are satisfied in respect of that year.

(2) A company that is not excluded by subsection (4) qualifies as a micro company in relation to a subsequent financial year (in this subsection referred to as the 'relevant year') if the qualifying conditions—

(a) are satisfied in respect of the relevant year and the financial year immediately preceding the relevant year,

(b) are satisfied in respect of the relevant year and the company qualified as a micro company in relation to the financial year immediately preceding the relevant year, or

(c) were satisfied in the financial year immediately preceding the relevant year and the company qualified as a micro company in relation to that preceding financial year.

(3) The qualifying conditions for a micro company are satisfied by a company if, in relation to a financial year, it—

(a) qualifies for the small companies regime, and

(b) fulfils 2 or more of the following requirements:

(i) the amount of turnover of the company does not exceed €700,000;

(ii) the balance sheet total of the company does not exceed €350,000;

(iii) the average number of employees does not exceed 10.

(4) This section shall not apply to a company if it is—

(a) an investment undertaking,

(b) a financial holding undertaking,

(c) a holding company that prepares group financial statements, or

(d) a subsidiary that is included in the consolidated financial statements of a higher holding undertaking.

(5) In the application of this section to any period which is a financial year but is not in fact a year, the amount specified in subsection (3)(b)(i) shall be proportionately adjusted.

(6) For the purposes of subsection (3)(b)(iii), the average number of employees of a company shall be determined by applying the methods specified in section 317 for determining the number required by subsection (1)(a) of that section to be stated in a note to the financial statements of a company.

(7) In this section, ‘qualifying conditions’ mean the conditions specified in subsection (3).

Micro companies regime

280E. Where a company qualifies as a micro company in accordance with section 280D, then, as provided in this Part, different rules may be applied (in this Act referred to as the 'micro companies regime') to the company in respect of financial statements and reports for a financial year in relation to which that company so qualifies as a micro company.

Qualification of company as medium company: general

280F. (1) A company that is not excluded by subsection (4) qualifies as a medium company in relation to its first financial year if the qualifying conditions are satisfied in respect of that year.

(2) A company that is not excluded by subsection (4) qualifies as a medium company in relation to a subsequent financial year (in this subsection referred to as 'relevant year') if the qualifying conditions—

(a) are satisfied in respect of the relevant year and the financial year immediately preceding the relevant year,

(b) are satisfied in respect of the relevant year and the company qualified as a medium company in relation to the financial year immediately preceding the relevant year, or

(c) were satisfied in the financial year immediately preceding the relevant year and the company qualified as a medium company in relation to that preceding financial year.

(3) The qualifying conditions for a medium company are satisfied by a company if, in relation to a financial year, it fulfils 2 or more of the following requirements:

(a) the amount of turnover of the company does not exceed €40 million;

(b) the balance sheet total of the company does not exceed €20 million;

(c) the average number of employees does not exceed 250.

(4) This section shall not apply to a company if it is—

(a) a holding company,

(b) an ineligible company,

(c) a company that qualifies for the small companies regime, or

(d) a company that qualifies for the micro companies regime.

(5) In the application of this section to any period which is a financial year but is not in fact a year, the amount specified in subsection (3)(a) shall be proportionately adjusted.

(6) For the purposes of subsection (3)(c), the average number of employees of a company shall be determined by applying the methods specified in section 317 for determining the number required by subsection (1)(a) of that section to be stated in a note to the financial statements of a company.

(7) In this section, ‘qualifying conditions’ mean the conditions referred to in subsection (3).

Qualification of company as medium company: holding company

280G. (1) A holding company qualifies as a medium company in relation to a financial year only if the group, in respect of which it is the holding company, qualifies as a medium group.

(2) A group that is not excluded by subsection (5) qualifies as a medium group in relation to the first financial year of the holding company if the qualifying conditions are satisfied in respect of that year.

(3) A group that is not excluded by subsection (5) qualifies as a medium group in relation to a subsequent financial year (in this subsection referred to as 'relevant year') of the holding company if the qualifying conditions—

(a) are satisfied in respect of the relevant year and the financial year immediately preceding the relevant year,

(b) are satisfied in respect of the relevant year and the group qualified as a medium group in relation to the financial year immediately preceding the relevant year, or

(c) were satisfied in the financial year immediately preceding the relevant year and the group qualified as a medium group in relation to that preceding financial year.

(4) The qualifying conditions for a medium group are satisfied by a group if, in relation to a financial year, it fulfils 2 or more of the following requirements:

(a) the aggregate amount of turnover of the group does not exceed €40 million net (or €48 million gross);

(b) the aggregate balance sheet total of the group does not exceed €20 million net (or €24 million gross);

(c) the aggregate average number of employees of the group does not exceed 250.

(5) This section shall not apply to the holding company of a group if any member of the group is an ineligible entity.

(6) In the application of this section to any period which is a financial year but is not in fact a year, the amounts specified in subsection (4)(a) shall be proportionally adjusted.

(7) The aggregate figures referred to in subsection (4) shall be ascertained by aggregating the equivalent figures determined in accordance with section 280F for each member of the group.

(8) Where a group proposes to satisfy the qualifying conditions referred to in subsection (4) on the basis of the requirements of paragraphs (a) and (b) of that subsection, it may do so on the basis of either the net figures or the gross figures respectively for both of the said paragraphs.

(9) The figures for each subsidiary undertaking shall be those included in its entity financial statements for the relevant financial year—

(a) if its financial year ends with that of the holding company, that financial year, and

(b) if not, its financial year ending last before the end of the financial year of the holding company.

(10) In this section—

‘first financial year of a holding company’ means the first financial year at the end of which the company qualifies as a holding company by virtue of having one or more subsidiaries;

‘qualifying conditions’ mean the conditions referred to in subsection (4).

(11) For the purposes of this section, in relation to the aggregate figures for turnover and balance sheet total—

‘net’ means after set-offs and other adjustments made to eliminate group transactions—

(i) in the case of Companies Act financial statements, in accordance with Schedule 4, and

(ii) in the case of IFRS financial statements, in accordance with international financial reporting standards;

‘gross’ means without those set-offs and other adjustments.

Qualification of company as large company

280H. A company that does not qualify as—

(a) a small company in accordance with section 280A or 280B,

(b) a micro company in accordance with section 280D, or

(c) a medium company in accordance with section 280F or 280G,

shall be deemed to be a large company.”.