After consulting on proposals to adjust company size criteria in light of the inflation trend in the euro zone, the European Commission decided this week to amend the Financial Statements Directive.
The "balance sheet total" and "turnover" criteria that determine the limit amounts, among others, will be increased by 25% according to the proposals. The third size criterion, the average number of employees, is not changed under the proposal.
Control limits
Among other things, the limit amounts also determine whether a company is subject to audit. By increasing the two criteria, the European Commission believes that fewer companies will be subject to audit and the scope for sustainability reporting requirements (CSRD) under the Accounts Directive will also be reduced. As a result, some of the regulatory burden on companies will be removed.
Effective date
According to the provisions accompanying the amended Directive, member states must apply the new thresholds from the 2024 fiscal year at the latest, with the option of early application for the 2023 fiscal year. The decision on the option of early application is thus up to the Dutch legislature, as are possible transitional provisions.
In conclusion
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