CSRD: amendment Accounting Directive changes scope of reporting requirements
13 December 2023
The European Commission recently adjusted the size criteria from the Accounting Directive (2013/34/EU), which are used to determine the applicability and the time of application of the Corporate Sustainability Reporting Directive (CSRD). The adjustments are therefore relevant for determining whether and, if so, when the CSRD will apply to a particular company.
Article 3 of the Accounting Directive applies thresholds to distinguish between micro, small, medium-sized and large undertakings. This distinction is important for the application of financial reporting requirements and in terms of the information to be provided.
Application of size criteria to non-financial reporting
Based on these size criteria, Article 5 of the CSRD provides when the non-financial reporting requirements are to be applied. For example, large public-interest entities must report on the financial year starting on or after 1 January 2024, whereas small and medium-sized public-interest entities will not be subject to this obligation until the 2026 financial year. In addition, the size criteria can also affect the CSRD reporting standards.
The adjusted size criteria
The European Commission reviews the size criteria in relation to the impact of inflation at least every five years. In a first, this review prompted the European Commission to publish proposed adjustments for consultation last September. After the consultation period, the European Commission adopted a delegated directive, which is yet to be published in the Official Journal of the European Union. Update [30 January 2024]: the delegated directive was published in the Official Journal of the European Union on 21 December 2023 (numbered 2023/2775) and therefore entered into force on 24 December 2023. The Member States have to implement the delegated directive into their national laws before 24 December 2024.
The thresholds will change as follows:
| Category | Thresholds | Balance sheet total | Net turnover |
|
Micro |
Current |
≤ €350,000 |
≤ €700,000 |
|
|
Adjusted |
≤ €450,000 |
≤ €900,000 |
|
Small |
Current |
≤ €4,000,000 |
≤ €8,000,000 |
|
|
Adjusted |
≤ €5,000,000 |
≤ €10,000,000 |
|
Medium |
Current |
≤ €20,000,000 |
≤ €40,000,000 |
|
|
Adjusted |
≤ €25,000,000 |
≤ €50,000,000 |
|
Large |
Current |
> €20,000,000 |
> €40,000,000 |
|
|
Adjusted |
> €25,000,000 |
> €50,000,000 |
The thresholds for balance sheet total and net turnover thus increase by 25% to 28.6%. Article 2 of the delegated act states that these new thresholds are to be applied at the latest from financial year 2024. However, Member States may also allow entities to apply the amended thresholds early with retroactive effect from financial year 2023.
Check how this adjustment affects your organisation
From 2024, the Houthoff ESG Compass will also reflect these changes. The ESG Compass is a freely accessible tool to check which current and upcoming directives are relevant to your organisation. By launching the ESG Compass, you agree to Houthoff's terms of use.
