Accounts Exemptions

Large and Medium Regimes

The Companies Act 2017  in effect creates four levels of company financial reporting regimes. The changes were based on the EU Accounting Directive. One of its main purposes was to reduce compliance costs smaller companies as defined. It further harmonised common EU standards for financial statements. The Directive allowed states to opt to provide for a number of additional requirements above the minimum provided. Ireland and the UK have applied these requirements.

Schedule 3 of the Act provides for financial accounting principles, the form and content of entity financial statements with which medium and large companies must comply. The format of the balance sheet and profit and loss accounts must be prepared in accordance with Schedule 3 under the Companies Act entity framework. Schedule 4 is the equivalent for group financial statements.

The 2017 legislation inserted three new schedules into the Companies Act dealing with the content of financial statements and accounting policies. There are two further schedules which deal with group financial statements.

Small and Micro Regimes

Schedule 3A provides the accounting principles, form, and content of the financial statements of a company qualifying for the small companies regime.  Schedule 3B provides the equivalent principles, form, and content for financial statements for a company qualifying for the micro companies regime.

The Schedules set out the respective minimum requirements for small companies regime companies and micro companies regime companies and complement the existing schedule 3, which is applicable to all other companies (subject to alternative accounting frameworks that may be available to them)

The accounting principles and formats for the profit and loss accounts and balance sheet are broadly the same for Schedule 3 and 3A. Schedule 3A provides for a lesser degree of disclosures for small companies.

Micro Companies Exemption from Full Accounts

Micro-sized companies may be exempt from the full extent of the requirements relating to annual Financial Statements in respect of any financial year if in respect of that year and the financial year immediately preceding that year the company satisfies two of the three following conditions:
  • balance sheet total not exceeding €350,000
  • turnover not exceeding €700,000
  • employees not exceeding 10
The size exemptions do not apply to Public Limited or Public Unlimited companies. It does not apply to a company if the company is an investment undertaking, a financial holding undertaking, a holding company that prepares group financial statements, or a subsidiary that is included in the consolidated financial statements of a higher holding undertaking. Certain other less commonly encountered categories also do not qualify for the exemption.

Small Company Exemption from Full Accounts

A small sized company may qualify to furnish reduced financial information and/or provide reduced public disclosure of financial information.

A company may qualify as a small company if the company meets the qualifying conditions and qualified as a small company in that year and the preceding year. The qualifying conditions for a small company are that it fulfils two of the following requirements;.

  • turnover does not exceed €12 million;
  • balance sheet total does not exceed €6 million;
  • the average number of employees does not exceed 50.

As with micro-sized companies, certain categories of company do not qualify for the exemption.

Medium Company Exemptions from Full Accounts II

A company may qualify as a medium company if it meets the qualifying conditions for that year and the preceding year and qualified as a medium company in each of those years. The qualifying conditions for a medium company are that it satisfies two or more of the following requirements:

  • turnover does not exceed €40 million;
  • the balance sheet does not exceed €20 million;
  • the average number of employees does not exceed 250.

The turnover is measured by the profit and loss account for the relevant year. If the accounts are not for a full year or are for more than a year, they are adjusted accordingly. The balance sheet total is the aggregate of the amounts shown as assets on the company’s balance sheet.

The Companies Act 2017 Act removed the former exemption for medium-sized group companies from the obligation to prepare group financial statements and the right to file abridged financial statements. Medium-sized companies remain exempt from some of the obligations to make disclosures in the financial statements.

The size thresholds for medium-sized companies were increased significantly by the 2017 Act. Accordingly, many former medium-sized companies may qualify as small companies and retain the right to file abridged accounts and the exemption from consolidation.

Financial Services Companies

A range of companies in the financial services sector does not qualify for reduced disclosure, irrespective of whether they otherwise qualify as a small or medium company. They include

  • authorised investment firms,
  • authorised market operators,
  • businesses accepting deposits, building societies and credit institutions,
  • investment companies, certain management companies and trustees or custodians of investment entities,
  • collective investment undertakings, management trustees, and management companies or trustees for them,
  • investment limited partnerships and their management companies and trustees;
  • non-life insurance companies, life insurance companies and certain companies linked or associated with any of them;
  • insurance intermediaries.

Micro Company Exemption

The company’s annual return, to which Financial Statements are attached, must be filed on time for the year in question and the previous year. Micro companies who claim both the audit and abridgement exemptions are required to file:

  • the Balance Sheet of the company with of the “audit exemption statement” included at the bottom
  • notes to the Financial Statements

Micro companies are exempted from most provisions relating to the Notes to the Financial Statements. They are not required to prepare a directors report provided that the information required under section 328 CA 2014 is included as a note or a footnote to the balance sheet. They are exempt from the requirements in relation to financial instruments and business review. The financial statements of micro companies are presumed to give a true and fair view.

Small Company Exemption

Small companies are potentially exempt from the requirement to annex to the company’s annual return,

  • the statutory financial statements of the company;
  • the directors’ report; and
  • the statutory auditors’ report on the financial statements and directors’ report.

If a company that qualifies as a small company avails of this exemption, it shall instead annex to the annual return, a copy of each of the following:

  • abridged financial statements (in the manner specified) which have been approved and signed;
  • certain information required to be set out in the directors’ report and extracted therefrom (e.g. directors interest in shares); and
  • a special auditors’ report provided for below.

Former / Expiring Medium Company Exemption

A company that qualifies as a medium company could formerly avail itself of a similar exemption to that for small companies. This ceased to apply under the Companies Act 2017 unless the former medium company qualified as a small company under the increased thresholds in that Act.

Under the pre-2017 Act exemptions a medium-sized company could annex to its annual return, a copy of each of the following:

  • abridged financial statements in accordance with the provisions below for medium companies which have been approved and signed;
  • the directors’ report; and
  • the special auditors’ report in the form below.

A copy of the document for the above purposes is a copy of the original save for signatures and dates. It may appear in a typeset form. It is to be accompanied by a certificate of the director and secretary of the company, confirming that it is a true copy.

A company that qualifies as a small or medium company is exempt from the requirement to give information in its directors’ report regarding the use of financial instruments and to give an analysis of key performance indicators during that period.

Abridged Statements I

In the case of a small company, the abridged financial statements may be extracted from the statutory financial statements. In the case of IFRS standards, they shall comprise the balance sheet, certain notes to the financial statements including notes that provide information in relation to the maturity of non-current liabilities, and details of any security given in respect of those liabilities.

Where the statutory financial statements are prepared under the Companies Act financial accounting framework, they shall include the balance sheet, the required notes to the financial statements and certain (relatively few) of the notes to the financial statements required under the Companies Act format. If not already shown on the balance sheet, the total amounts falling due within one year and after one year in respect of debtors, shall be disclosed

Abridged financial statements of a medium company under the pre-2017 Act exemption, were the statutory financial statements except that the profit and loss account and notes might be abridged in the below manner. Where the directors were satisfied that the requirements for abridged statements had been complied with, they could be approved by the board of directors, by two or more directors or in the case of a sole director, by the sole director.

Abridged Statements II

Under each financial accounting framework, an abridged profit and loss account or income statement may show under the heading gross profit or loss, a single figure for the company’s turnover. The expenses for the period may be extracted in accordance with the IFRS financial standards or as specified for Companies Act accounts respectively.

Under the Companies Act standards, line items as provided for in the standard pro forma profit and loss account may be combined as specifically set out. The notes to the financial statements may be abridged such that items that are combined on the face of the statement are not separately identified in the notes.

There must also be included, a statement on the face of the abridged balance sheet by the directors that:

  • they have relied on the exemption
  • the basis on which the company is entitled to the benefit of the small company or medium company treatment as the case may be; and that
  • the abridged financial statements have been prepared in accordance with the Companies Act requirements.

The signatures shall be inserted on the face of the abridged balance sheet after the statement above. Every copy of the balance sheet which is approved and circulated or published shall state the names of the persons who signed the balance sheet on behalf of the board.

Abridged Accounts III

There shall be annexed to the annual return delivered to the CRO the following:

  • a copy of the abridged financial statements;
  • the names of the directors who signed the abridged balance sheet;
  • the information extracted from the directors’ report as required, accompanied by a certificate saying that it is a true copy of the information laid before the general meeting; the copy of the directors’ report shall state the names of the directors who signed the report, where applicable; and
  • a copy of the special statutory auditors’ report, which shall state the name of the statutory auditors.

If abridged financial statements are approved which have not been prepared in accordance with the above provisions, every director of the company who is party to their approval, and who knew that they have not been so prepared or is reckless as to whether they have been so prepared, is guilty of a category 2 offence. The failure to annex the required documents to the annual return is an offence on the part of the company and any officer in default.

Every director of the company at the time the abridged financial statements were approved shall be taken to be a party to their approval unless he can show that he took all reasonable steps to prevent their being approved.

Special Auditors Report

There shall accompany the abridged financial statements annexed to the annual return to be delivered to the CRO, a copy of a special report of the statutory auditor to the directors containing a statement on the below mentioned matters in relation to the abridged financial statements and a copy of the statutory auditors’ report in the format required by the legislation.

Where the directors of the company propose to annex to the annual return abridged financial statements, and the statutory auditors are of the opinion that the directors of the company are entitled, for that purpose, to rely on the exemption and the abridged financial statements have been properly prepared in accordance with the legislation, it is the duty of the statutory auditors of the company to state in the special report that, in their opinion the directors are so entitled and that the abridged financial statements are properly so prepared.

The original of the statutory auditor’s report, signed by the auditors shall bear the date of signing. The provisions generally applicable to the signing of the auditor’s report apply. Every copy of the special report of the statutory auditors which has been circulated, published or issued, shall state the name of the statutory auditor. Failure to comply by the company or by an officer in default is a category 2 offence. This also applies to de facto directors and shadow directors.

Guaranteed EEA Subsidiaries

A company which is a subsidiary of a holding company established in the EEA, is exempted from the provisions regarding annexation of documents to the annual return provided that:

  • every company who is a shareholder at the date of the annual general meeting after year end shall declare its consent to the exemption;
  • there is in force an irrevocable guarantee by the holding company of all amounts shown as liabilities in the statutory financial statements of the company in respect of the financial year;
  • the company has notified every shareholder above of the guarantee;
  • statutory financial statements of the company for that financial year are consolidated in the consolidated accounts prepared by the holding undertaking;
  • the exemption is disclosed in a note to the accounts;
  • a notice stating that the company has availed itself of the exemption in respect of that financial year together with a copy of the guarantee, notification and a declaration by the company in writing, is annexed to the annual return;
  • the consolidated accounts are drawn up in accordance with EU Directive requirements; and
  • a copy of the consolidated accounts of the holding company together with the report of the auditors are annexed to the annual return of the company availing itself of the exemption.

Where documents are other than in the English or Irish language, they shall be translated and certified to be a correctly translated.

References and Sources

Primary References


Companies Act 2014  S.350- S.357 (Irish Statute Book)

Companies Act 2014: An Annotation (2015) Conroy

Law of Companies 4th Ed.  (2016)   Ch.18  Courtney

Keane on Company Law 5th Ed. (2016)Ch.30  Hutchinson

Other Irish Sources

Tables of Origins & Destinations Companies Act 2014 (2016) Bloomsbury

Introduction to Irish Company Law    4th Ed. (2015) Callanan

Bloomsbury’s Guide to the Companies Act 2015      Courtney & Ors

Company Law in Ireland 2nd Ed. (2015) Thuillier

Pre-2014 Legislation Editions

Modern Irish Company Law   2nd Ed. (2001) Ellis

Cases & Materials Company Law 2nd Ed. (1998) Forde

Company Law 4th Ed. (2008)  Forde & Kennedy

Corporations & Partnerships in Ireland (2010) Lynch-Fannon & Cuddihy

Companies Acts 1963-2012   (2012)  MacCann & Courtney

Constitutional Rights of Companies   (2007)  O’Neill

Court Applications Under the Companies Act (2013) Samad

Shorter Guides

Company Law – Nutshell 3rd Ed. (2013) McConville

Questions & Answers on Company Law (2008)        McGrath, N & Murphy

Make That Grade Irish Company Law 5th Ed. (2015) Murphy

Company Law BELR Series (2015)   O’Mahony

UK Sources

Companies Act 2006 (UK) (

Statute books Blackstone’s statutes on company law (OUP)

Gower Principles of Modern Company Law 10th Ed. (2016) P. and S. Worthington

Company Law in Context 2nd Ed. (2012) D Kershaw

Company Law (9th Ed.) OUP (2016) J Lowry and A Dignam

Cases and Materials in Company law 11th Ed (2016) Sealy and Worthington


UK Practitioners Services

Tolley’s Company Law Handbook

Palmer’s Company Law