Micro Company legislation should have been introduced far sooner...as part of the Companies Act 2014, now that its here we may embrace its attributes.

_{August 12, 2017}

Legislation brought in by the new Companies Act 2017.. worth the wait!

The Companies (Accounting) Act 2017 which was commenced on 9 June 2017 introduced a new “micro” category of company and can be applied to financial years beginning 1st January 2015.

We at, John M Shanahan & Co, Chartered Accountants, Tullamore, Co Offaly have looked at the criteria in play since 9th June 2017 which may effect your reporting requirements this year. 

As micro-companies are in most instances owner-managed, statutory financial statements are not required to facilitate communication between the shareholders and the directors in the company.

In order to be categorised as a micro company, a company must satisfy at least two of the following conditions:

• Turnover must be less than €700,000;
• Balance Sheet must be less than €300,000;
• There must be less than 10 employees.

The main features of the micro companies regime are:

1. A simpler balance sheet and profit and loss account.  There are two formats for the balance sheet and one format for the profit and loss account.
2. A company that elects to adopt the micro companies regime is not required to prepare a directors’ report, provided that information in relation to the acquisition or disposal of own shares by the company is provided elsewhere as a note.
3. Limited disclosure by way of notes to the financial statements are required under the micro companies regime.
4. Where a micro entity chooses to disclose additional information above and beyond those mandated by law, it should follow the disclosure requirements of the relevant accounting standard.
5. The fair value accounting and alternative accounting rules cannot be applied in micro entity financial statements. This means that no revaluations or subsequent measurement at fair value is permitted under the micro companies regime.
6. Micro company financial statements prepared in accordance with applicable accounting standards,the micro companies regime and other relevant provisions of the Companies Act 2017, are presumed by law to give a true and fair view.

For some small companies, the administrative burdens associated with comprehensive financial reporting requirements are disproportionate when compared to other Small and Medium Size Enterprises. The creation of the micro-company will lessen their disclosure requirements.

 We at JOHN M. SHANAHAN & CO. are here to help you with all your accounting , financial and taxation requirements, by providing expert, specialist and professional service tailored to meet your needs.

Phone 057 93 22100 or email info@shanahan.ie or use our contact form here- Contact Form.