News item | 22-12-2023 | 2:34 PM
The government has made a proposal to require fewer companies to have their annual reporting audited by an accountant and to draw up a management report. This reduces the burden on companies and the pressure on the audit capacity of accountants.
The proposal implements a European Commission directive that incorporates inflation over the past 10 years into the criteria used to classify companies. This classification determines the degree of accountability that companies must provide for their finances.
Companies are classified based on their balance sheet total and net turnover. The categories of companies are micro, small, medium and large. The limits for this classification will be increased by 25%, which means that some companies will fall into a smaller category. In this smaller category, they need to include less information in their annual reporting and in some cases they no longer need to have it checked by an accountant. The estimated savings for the business community from this increase is approximately €45 million. The proposal is that companies may also apply the increased limit amounts for the 2023 financial year. This was an express wish of the business community and accountancy organizations.
European guide line
The proposal implements the directive that the European Commission published on October 19, 2023 to increase the limit amounts for micro, small, medium and large legal entities. Minister Weerwind for Legal Protection implements the increase with an order in council. The Council of Ministers has agreed to submit this draft decision to the Council of State for advice. The final decision is expected to be published in the 1st quarter of 2024.