CNC-CBN draft opinion on the amended size criteria for small companies

In a previous article, we discussed the modified size criteria. As mentioned then, there is still some uncertainty regarding the interpretation of the delay effect (the so-called 'consistency principle'). In legal doctrine, there are different views on the one-time exemption foreseen upon the introduction of the new threshold amounts.

Recently, the Commission for Accounting Standards (CNC-CBN) published a different view in its draft opinion of June 26, 2024, which we will explain for you below.

Implementation and delay effect

In principle, the new threshold values apply to fiscal years starting after December 31, 2023.

However, it is provided that for annual accounts closed after December 31, 2023, only the increased size criteria of the 'relevant fiscal year' will be considered. As a form of exception, the delay effect will not apply to this closure, meaning that the figures of the two preceding fiscal years do not need to be tested against the size criteria.

CNC-CBN draft opinion

Companies with a fiscal year based on the calendar year

According to the CNC-CBN draft opinion, the size of the company for the 2024 fiscal year (fiscal year from 01/01/2024 to 31/12/2024) should only be assessed on the basis of the figures as of 31/12/2024. It should be checked whether the figures as of 31/12/2024 exceed more than one of the new (increased) size criteria.

From the following fiscal year (fiscal year 2025) onwards, the consistency principle applies again. If, as of 31/12/2024, no more than one of the size criteria was exceeded, the company remains 'small' in the 2025 fiscal year. Due to the delay effect, this status will be maintained for the following financial year (financial year 2026) if all other circumstances remain unchanged.

(*) In practice, the figures as of 31/12/2023 will actually have no impact here due to the one-time exemption from the consistency principle.

Note:

• Under this CNC-CBN view, it is certainly possible for a (single) company to still be classified as 'large' for the 2023 fiscal year but suddenly be considered 'small' for the 2024 fiscal year, because it does not exceed more than one of the new, increased size criteria as of 31/12/2024.

• If this company is 'small' for the 2024 fiscal year but exceeds multiple size criteria in subsequent fiscal years, it may still remain 'small' for the 2025 and 2026 fiscal years due to the delay effect. In this view, the figures as of 31/12/2024 are of great importance!

Companies with a broken fiscal year

For a fiscal year that runs, for example, from 1/4/2024 to 31/3/2025 (= the first fiscal year starting after 31/12/2023), only the figures as of 31/3/2024 should be considered, according to the CNC-CBN.

Only from the following fiscal year (fiscal year from 1/4/2025 to 31/3/2026) will the consistency principle apply again.

(i)NPOs and foundations

In mid-July, the CNC-CBN also published a separate draft opinion on the consequences of the increase in size criteria for NPOs and foundations. It is noteworthy that the formulation of the one-time exemption from the consistency principle differs. For this reason, when assessing the size of an NPO or foundation for the 2024 fiscal year (based on the calendar year), only the figures as of 31/12/2023 should be considered, and not as of 31/12/2024 as is the case for companies!

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