Companies (Accounting) Act 2017

PART 1 Preliminary and General

1. Short title and commencement

1. (1) This Act may be cited as the Companies (Accounting) Act 2017.

(2) Subject to subsection (2) of section 78, this Act shall come into operation on such day or days as the Minister may appoint by order or orders either generally or with reference to any particular purpose or provision, or financial year or part thereof, and different days may be so appointed for different purposes, different provisions, or different financial years or parts thereof.

2. Definitions

2. In this Act—

“Minister” means the Minister for Jobs, Enterprise and Innovation;

“Principal Act” means the Companies Act 2014.

3. Repeals and revocations

3. (1) Each of the following provisions of the Principal Act is repealed:

(a) section 297;

(b) section 298;

(c) section 350;

(d) section 351;

(e) section 354;

(f) section 917;

(g) section 994;

(h) section 1214;

(i) subsections (2) and (3) of section 1218;

(j) subsection (5) of section 1237;

(k) section 1268;

(l) subsection (1) of section 1272.

(2) Each of the following statutory instruments is revoked:

(a) European Union (International Financial Reporting Standards) Regulations 2012 (S.I. No. 510 of 2012);

(b) European Union (Traded Companies - Corporate Governance Statements) Regulations 2015 (S.I. No. 423 of 2015).

PART 2 Amendment of Principal Act

4. Amendment of section 7 of Principal Act

4. Section 7 of the Principal Act is amended, in subsection (5)(b)—

(a) by the substitution of the following subparagraph for subparagraph (i):

“(i) by any person as a nominee for the superior company or by any person acting in that person’s own name but on behalf of the superior company (except where, in either case, the superior company is concerned only in a fiduciary capacity), or”,

and

(b) by the insertion, in subparagraph (ii), of “or by any person acting in that person’s own name but on behalf of,” after “or by a nominee for,”.

5. Amendment of section 9 of Principal Act

5. Section 9 of the Principal Act is amended—

(a) in subsection (2), by the substitution of the following for paragraph (a):

“(a) Parts 16 to 26 (or instruments under them) and Schedules 7 to 18; and”,

and

(b) in subsection (4), by the substitution, in paragraph (b), of “Parts 16 to 26” for “Parts 16 to 25”.

6. Amendment of section 68 of Principal Act

6. Section 68 of the Principal Act is amended—

(a) in subsection (2), by the substitution of “Subject to subsection (8A), a company shall” for “A company shall”, and

(b) by the insertion of the following subsection after subsection (8):

“(8A) Subsection (2) shall not apply to securities (or interests in them) which were, prior to 1 June 2015, admitted to trading or listed on any market, whether a regulated market or not, in the State or elsewhere.”.

7. Amendment of section 72 of Principal Act

7. Section 72 of the Principal Act is amended by the substitution of the following subsection for subsection (7):

“(7) In relation to a company and its shares and capital, the following definitions apply for the purposes of this section:

‘arrangement’ means any agreement, scheme or arrangement (including an arrangement sanctioned under section 453 or 601);

‘company’, other than in relation to the issuing company, includes any body corporate;

‘equity share capital’ means the company’s issued share capital excluding any part of it which, neither as respects dividends nor as respects capital, carries any right to participate beyond a specified amount in a distribution;

‘equity shares’ means shares comprised in the company’s equity share capital;

‘non-equity shares’ means shares (of any class) not comprised in the company’s equity share capital.”.

8. Amendment of section 85 of Principal Act

8. Section 85 of the Principal Act is amended by the substitution of the following subsection for subsection (2):

“(2) If a company proposes to apply to the court for an order confirming the resolution, it shall cause notice of its intention to make such an application—

(a) to be advertised once at least in one daily newspaper circulating in the district where the registered office or principal place of business of the company is situated, and

(b) to be notified by electronic means to all creditors of the company who are resident, or have their principal place of business, outside the State,

and that advertisement and that notification shall indicate a means by which there will be notified by the company to any inquirer the date on which that hearing will take place (or any change in the date of such) and the company shall, accordingly, notify to any inquirer, by those means, the first-mentioned date on request being made by the inquirer therefor (and shall make satisfactory arrangements with the inquirer for the notification, by these means or such other means as may be agreed between them, to the inquirer of a change in that date).”.

9. Amendment of section 167 of Principal Act

9. Section 167 of the Principal Act is amended—

(a) in subsection (1)—

(i) by the substitution, in the definitions of “amount of turnover” and “balance sheet total”, of “section 275” for “section 350”, and

(ii) by the substitution of “section 943(1)(i)” for “section 945(1)(k)” in each place that it occurs,

and

(b) by the substitution of “relevant company” for “large company” in each place that it occurs.

10. Amendment of section 272 of Principal Act

10. Section 272 of the Principal Act is amended, in subsection (2)(a), by the substitution of “Schedule 3, 3A, 3B, 4 or 4A, as the case may be,” for “Schedule 3 or 4”.

11. Amendment of section 274 of Principal Act

11. Section 274 of the Principal Act is amended, in subsection (1), in the definition of “profit and loss account” by the substitution of the following paragraph for paragraph (a):

“(a) for the avoidance of doubt—

(i) in the case where the financial statements are prepared in accordance with IFRS, the expression means a statement of profit or loss and other comprehensive income or equivalent term referred to in those standards, and

(ii) in the case of a company not trading for the acquisition of gain by its members, the expression means an income and expenditure account, and references to—

(I) a profit and loss account, and

(II) in the case of group financial statements, a consolidated profit and loss account,

shall be read accordingly, and”.

12. Amendment of section 275 of Principal Act

12. Section 275 of the Principal Act is amended—

(a) in subsection (1)—

(i) by the insertion of “and Part 26” after “In this Part”,

(ii) by the insertion of the following definitions:

“ ‘Accounting Directive’ means Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013[^2] on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC;

‘amount of turnover’, in relation to a company, means the amount of the turnover shown in the company’s profit and loss account;

‘balance sheet total’, in relation to a company, means the aggregate of the amounts shown as assets in the company’s balance sheet;

‘ineligible entities’ means undertakings that—

(a) have transferable securities admitted to trading on a regulated market of any Member State,

(b) are credit institutions,

(c) are insurance undertakings, or

(d) are—

(i) undertakings that—

(I) fall within any of the provisions of Schedule 5, or

(II) are otherwise designated, by or under any other enactment, to be entities referred to in point (1)(d) of Article 2 of the Accounting Directive,

or

(ii) undertakings that are designated, by or under the law of any other Member State, to be entities referred to in point (1)(d) of Article 2 of the Accounting Directive and ‘ineligible company’ shall be read accordingly;

‘large company’ shall be read in accordance with section 280H;

‘medium company’ shall be read in accordance with section 280F or 280G, as may be appropriate; and ‘medium group’ shall be read accordingly;

‘micro company’ shall be construed in accordance with section 280D;

‘micro companies regime’ has the meaning assigned to it by section 280E;

‘small company’ shall be read in accordance with section 280A or 280B, as may be appropriate; and ‘small group’ shall be read accordingly;

‘small companies regime’ has the meaning assigned to it by section 280C;”,

and

(iii) in the definition of “credit institution”—

(I) in paragraph (b), by the substitution of “(within the meaning of the Consumer Credit Act 1995)” for “(within the meaning of the Hire Purchase Act 1946)”, and

(II) in paragraph (c), by the substitution of “or other repayable funds from the public and” for “or other repayable funds or”,

(b) by the substitution of the following subsection for subsection (5):

“(5) A word or expression that is used in this Part, Part 26 or in Schedules 3, 3A, 3B, 4 or 4A and that is also used in the Accounting Directive shall have the same meaning in this Part, Part 26 or in those Schedules, as the case may be, as it has in the Accounting Directive.”,

and

(c) by the deletion of subsection (6).

13. Construction of references to exemption

13. The Principal Act is amended by the substitution of the following section for section 277:

“277. (1) Subsection (2) is in addition to the provision made by this Part enabling certain elections to be made by a company that qualifies for the small companies regime or the micro companies regime.

(2) Any provision of this Part providing for an exemption from a requirement of this Part does not prevent the company concerned, if it so chooses, from doing the thing that the provision provides it is exempted from doing (the ‘specified thing’).

(3) If the company concerned chooses to do the specified thing—

(a) the provisions required by this Part to be complied with, in relation to the doing of such a thing, and

(b) the provisions specified by this Part to apply, in a case where such a thing is done,

as the case may be, shall be complied with or shall apply accordingly, but this does not prejudice any provision of this Part concerning the making of an election referred to in subsection (1) by a company there referred to (or concerning the effect of the company’s having so done).

(4) Subsection (2) applies whether the expression ‘shall be exempt’ or ‘need not’ or any other form of words is used in the provision concerned.”.

14. Certain companies may apply provisions of Act to certain earlier financial years

14. The Principal Act is amended by the insertion of the following section after section 277:

“277A. (1) Subject to this section, the directors of a company may, before the operative date of the provisions of the Act of 2017 specified in subsection (4) (the ‘specified provisions of the Act of 2017’), opt to prepare and approve statutory financial statements for the company in accordance with those specified provisions for any financial year which commenced on or after 1 January 2015.

(2) All obligations and rights that arise under this Act consequent on or in respect of financial statements having been approved by directors of a company shall likewise arise in relation to financial statements approved by directors in a case falling within subsection (1).

(3) In determining whether a company or group qualifies as—

(a) a medium company under section 280F or 280G, as the case may be,

(b) a small company under section 280A or 280B, as the case may be, or

(c) a micro company under section 280D,

in relation to a financial year to which the specified provisions of the Act of 2017 have effect, the company or group, as may be appropriate shall be treated as having qualified as a medium company, small company or micro company, as the case may be, in any previous year in which it would have so qualified if the qualifying conditions applicable to that company or group, as the case may be, had had effect in relation to that previous year.

(4) Each of the following is a specified provision of the Act of 2017:

(a) section 3;

(b) section 4;

(c) sections 10 to 12;

(d) sections 15 to 25;

(e) paragraphs (a), (b) and (d) of section 26;

(f) sections 29 to 57;

(g) section 59;

(h) sections 62 to 64;

(i) sections 81 and 82;

(j) section 84;

(k) section 88;

(l) section 89.

(5) In this section—

‘Act of 2017’ means the Companies (Accounting) Act 2017;

‘operative date’ means the date on which the specified provision comes into operation pursuant to an order under section 1(2) of the Act of 2017;

‘qualifying conditions’ has the same meaning as it has—

(a) in relation to a medium company, in section 280F(7) or 280G(10), as the case may be,

(b) in relation to a small company, in section 280A(7) or 280B(10), as the case may be, and

(c) in relation to a micro company, in section 280D(7).”.

15. Qualification of company based on size of company

15. The Principal Act is amended, in Part 6, by the insertion of the following Chapter after Chapter 1:

“CHAPTER 1A

Qualification of company based on size of company

Qualification of company as small company: general

280A. (1) A company that is not excluded by subsection (4) qualifies as a small company in relation to its first financial year if the qualifying conditions are satisfied in respect of that year.

(2) A company that is not excluded by subsection (4) qualifies as a small company in relation to a subsequent financial year (in this subsection referred to as 'relevant year') if the qualifying conditions—

(a) are satisfied in respect of the relevant year and the financial year immediately preceding the relevant year,

(b) are satisfied in respect of the relevant year and the company qualified as a small company in relation to the financial year immediately preceding the relevant year, or

(c) were satisfied in the financial year immediately preceding the relevant year and the company qualified as a small company in relation to that preceding financial year.

(3) The qualifying conditions for a small company are satisfied by a company if, in relation to a financial year, it fulfils 2 or more of the following requirements:

(a) the amount of turnover of the company does not exceed €12 million;

(b) the balance sheet total of the company does not exceed €6 million;

(c) the average number of employees does not exceed 50.

(4) This section shall not apply to a company if it is—

(a) a holding company, or

(b) an ineligible company.

(5) In the application of this section to any period which is a financial year but is not in fact a year, the amount specified in subsection (3)(a) shall be proportionately adjusted.

(6) For the purposes of subsection (3)(c), the average number of employees of a company shall be determined by applying the methods specified in section 317 for determining the number required by subsection (1)(a) of that section to be stated in a note to the financial statements of a company.

(7) In this section, ‘qualifying conditions’ mean the requirements specified in subsection (3).

Qualification of company as small company: holding company

280B. (1) A holding company qualifies as a small company in relation to a financial year only if the group, in respect of which it is the holding company, qualifies as a small group in relation to that same financial year.

(2) A group that is not excluded by subsection (5) qualifies as a small group in relation to the first financial year of the holding company if the qualifying conditions are satisfied in respect of that year.

(3) A group that is not excluded by subsection (5) qualifies as a small group in relation to a subsequent financial year (in this subsection referred to as 'relevant year') of the holding company if the qualifying conditions—

(a) are satisfied in respect of the relevant year and the financial year immediately preceding the relevant year,

(b) are satisfied in respect of the relevant year and the group qualified as a small group in relation to the financial year immediately preceding the relevant year, or

(c) were satisfied in the financial year immediately preceding the relevant year and the group qualified as a small group in relation to that preceding financial year.

(4) The qualifying conditions for a small group are satisfied by a group if, in relation to a financial year, it fulfils 2 or more of the following requirements:

(a) the aggregate amount of turnover of the group does not exceed €12 million net (or €14.4 million gross);

(b) the aggregate balance sheet total of the group does not exceed €6 million net (or €7.2 million gross);

(c) the aggregate average number of employees of the group does not exceed 50.

(5) This section shall not apply to a holding company of a group if any member of the group is an ineligible entity.

(6) In the application of this section to any period which is a financial year but is not in fact a year, the amounts specified in subsection (4)(a) shall be proportionally adjusted.

(7) The aggregate figures referred to in subsection (4) shall be ascertained by aggregating the equivalent figures determined in accordance with section 280A for each member of the group.

(8) Where a group proposes to satisfy the qualifying conditions referred to in subsection (4) on the basis of the requirements of paragraphs (a) and (b) of that subsection, it may do so on the basis of either the net figures or the gross figures respectively for both of the said paragraphs.

(9) The figures for each subsidiary undertaking shall be those included in its entity financial statements for the relevant financial year—

(a) if its financial year ends with that of the holding company, that financial year, and

(b) if not, its financial year ending last before the end of the financial year of the holding company.

(10) In this section—