The Accounting Act has been renewed: Do I still have to make a financial statement?

With the reform, the definition of SMEs has expanded and a separate category was created for micro-enterprises that receive special concessions in respect to financial statements. The new Accounting Act also defines what information companies in each category must present in their financial statements. Big companies are required to present an annual report as well as a financial statement where as middle-sized companies are only required to present their annual report.

The new Accounting Act defines a big company as one that exceeds two of the following thresholds: turnover of 40M€, balance of 20M€ and 250 employees. A middle-sized company only exceeds one of the aforementioned thresholds.

A small company is defined as one when if they exceed one of the following thresholds:  turnover of 12M€, balance of 6M€ and employees 50. A micro-enterprise can only exceed in one of the following thresholds: net sales of 0.7M€, balance of 0.35M€ and 10 employees.

With the reformations, many traders and freelancers don’t have the obligation of making financial statements anymore. In case two of the thresholds for micro-enterprises are exceeded, the company must make a financial statement. However, we do recommend that companies of all sizes make a financial statement, because the information found in financial statements is often necessary in applying for permits from authorities and in making declarations to the tax authorities as well as to other authorities.

A trader or freelancer is obliged to keep double-entry bookkeeping if two of the following thresholds are exceeded during the previous financial year or the financial year before the last: balance of 100 000€, net sales of 200 000€ and an average of 3 employees.