The Companies (Accounting) Bill, 2016 is expected to introduce several changes to the Companies Act, 2014. The Bill has been in draft since prior to Christmas last year and it is speculated that it will be introduced in the Dail before the Summer recess.

Among the changes the Bill will introduce is:

1. A new type of company called “the Micro Entity” which will impact on accounting disclosures. The name is slightly misleading in that it is only for companies and not for other types of entity.

2. It is expected the regime would apply for accounting periods beginning on or after 1 January 2016.

3. The regime is an ‘opt in’ one and is not compulsory. Companies are free to use FRS 102 instead, but that requires more widespread use of ‘fair value’ measurement rules, while FRS 105 uses ‘cost’, which is a lot simpler.

4. The Micro Company will have far less accounting disclosure requirements than an ordinary ‘small’ company. It will be basically a Profit & Loss Account, Balance Sheet and a certain minimum number of notes.

5. The only notes required are for directors’ benefits such as advances, credits and guarantees made on behalf of a director.

6. The regime will not apply to certain regulated entities like credit institutions, insurance intermediaries and charities, among others.

7. Cost will be the main measurement rule used. The expected size thresholds are:

  • Turnover not to exceed €700,000, excluding VAT.
  • Balance sheet total assets (fixed plus current, ignore liabilities) not to exceed €350,000.
  • Average monthly number of employees not to exceed 10.

8. In order to qualify the micro company must satisfy two of the three criteria for two consecutive years, except in the first year.

To hear more about the latest accounting changes in Irealnd on FRS 102 and FRS 105, come to our public course on Monday 27 June 2016 at the Talbot Hotel, Stillorgan, County Dublin (free parking at venue).

For booking and more informaiton click here.