Private limited companies are required to attach audited financial statements to their annual returns when submitted to the companies registration office (CRO), in accordance with the Companies Amendment Act. 1986.
The Companies (Amendment)(No.2) Act 1999, introduced an exemption from the requirement for certain small private limited companies to have their financial statements audited where specific criteria or size thresholds were met.
Under new legislation, enacted on 7th August 2012, a company can now avail of the audit exemption provided the turnover of the Company does not exceed €8,800,000 and the balance sheet total (gross assets) does not exceed €4,400,000. The average number of employees must not exceed 50 (no change).
This represents an increase in the turnover criteria by €1,500,000 from €7,300,000 to €8,800,000 and an increase in the balance sheet total criteria of €750,000 from €3,650,000 to €4,400,000.
Small Companies - Increase in threshold for filing exemptions
Where a company has availed of audit exemption, there is still the requirement to attach annual financial statements to their annual returns when submitted to the companies registration office (CRO).
Where a company meets the definition of a small company, they can avail of certain filing exemptions. These accounts are referred to as ‘abridged‘ financial statements as they do not contain the full information included in the financial statements prepared for the shareholders. For example; they will not include a directors’ report, profit and loss account and will have limited notes.
Under the new legislation a company can now be defined as a small company provided the turnover does not exceed €8,800,000 and the balance sheet total does not exceed €4,400,000.
Prior to the change a private company qualified to be a small sized company if in that year and the previous financial year it satisfied two of the three conditions:
Dylan Byrne is Partner OSK Audit.
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