Adjustment of size criteria for micro, small, medium and large companies or groups
21/11/2024
In the context of the transposition of Commission Delegated Directive (EU) 2023/2775 of 17 October 2023 amending Directive 2013/34/EU of the European Parliament and of the Council as regards the adjustment of the size criteria for micro, small, medium-sized and large enterprises and groups, Luxembourg adopted the Grand Ducal Regulation of 25 October 2024.
- INTRODUCTION
The main objectives of accounting reporting requirements are to inform investors in capital markets, provide an overview of past transactions, and improve corporate governance. It is of paramount importance to streamline these requirements so that they can achieve their aims while minimizing the administrative burden on companies.
- RATIONALE?
The figures provided by Eurostat indicate cumulative inflation over a period of around ten years (1st January 2013 to 31 March 2023) of around 24.3% in the eurozone and over 27% in the European Union as a whole. In addition, the high inflation observed in 2021 and 2022 has led the Commission to review the financial criteria determining the size category of companies with a view to re-evaluating them, resulting in an adjustment of 25%, which it has deemed necessary, and to round up the thresholds for determining the category of companies and groups.
- EFFECT?
This increase in thresholds will lead to a re-categorisation of certain large companies as medium-sized, exempting them from publishing sustainability information. At the same time, some medium-sized companies will become small companies, exempting them from having their accounts audited by a statutory auditor. As for groups, some will fall outside the criteria and will be exempt from publishing consolidated accounts.
- AMENDMENTS?
- The law of 10 August 1915 concerning commercial companies, as amended:
Article 1711-4 stating the rule concerning the obligation of parent companies to draw up consolidated accounts and a consolidated management report, will be amended as follows: