5 August 2016

Companies (Accounting) Bill 2016  

On 5 August 2016, the Government published the Companies (Accounting) Bill 2016. This Bill when enacted will amend the Companies Act 2014 and will transpose the EU Accounting Directive (Directive 2013/34/EU) into Irish Law.

The Bill when enacted proposes to introduce a small companies regime and a micro companies regime in Ireland.

  • allow for the use in Ireland of Section 1A of FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland by small companies. FRS102  was revised in 2015 and a new Section 1A introduced for small entities. This replaces the FRSEE with effect from 1 January 2016. Section 1A sets out the presentation and disclosure requirements for small entities based on the new small companies regime within company law. The recognition and measurement requirements of FRS102 continue to apply to companies applying Section 1A as does the requirement that the financial statements show a "true and fair" view. 

and

  • allow for the use of FRS 105 The Financial Reporting Standard applicable to the Micro-entites Regime by micro companies.  FRS105 is based on the recognition and measurement requirements of FRS 102, amended to comply with the legal framework for micro-entities. For example, amendments have been made to accommodate the fact that the micro-entities’ regime does not permit the revaluation or subsequent measurement of assets or liabilities at fair value. FRS 105 also reflects the fact that very limited disclosures are required in micro-entity accounts. 
  • The thresholds for small companies are proposed to be raised to the EU maximum levels of: turnover not exceeding €12 million and balance sheet total not exceeding €6 million.

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  • Large companies exceed 2 or more of the thresholds for as Medium company

As noted above, the Bill will amend Part 6, which is entitled “Financial Statements, Annual Return and Audit”, to give effect to the provisions in the Accounting Directive relating to the annual financial statements and related reports of companies. In addition the Bill also introduces a new stand-alone Part 26 into the Companies Act 2014 to transpose Chapter 10 of the Accounting Directive on reporting payments to governments by companies active in the extractive industries and in the logging of primary forests. The Bill will also provide for miscellaneous company law issues, not related to the transposition of the Accounting Directive covering, for example, reporting to the ODCE; priority of charges; filing requirements for unlimited companies; matters relating to IAASA and the prescribed accountancy bodies; and the corporate governance statement required in section 1373 of the Companies Act 2014.

The Bill as initialy proposed may change as the Billmakes it way through the Houses of the Oireachtas prior to being finally signed into law. 

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