The European Union is amending its Accounting Directive to adjust for inflation, increasing the monetary size criteria (balance sheet and net turnover) for micro, small, medium-sized and large companies by 25%. The size criteria laid out in the Accounting Directive are used as reference points for several other EU laws and will impact CSRD scoping requirements. Linklaters recently wrote an article about the change stating that:
“This increase in size criteria will not only reduce scope of application of presentation, audit, and publication requirements set out in the Accounting Directive but also reduce the scope of application of the Corporate Sustainability Reporting Directive (CSRD) and the Taxonomy Regulation for large undertakings, listed small and medium-sized undertakings, as well as large groups.”
This amendment comes in the form of a delegated directive and is subject to a two-month scrutiny period by the Parliament and Council. Provided objections are not filed, these changes will come into effect on January 1, 2024. Some companies requested changes to the employee thresholds used in classifying companies, but those will not be increased.
Our Checklist “6 Things You Need to Know about the CSRD” has been updated to reflect this change in the Accounting Directive. Additionally, we’ll be talking more about this and other scoping considerations at our upcoming November 9th webcast “Understanding the CSRD and its Impacts on US Companies” where our panel will cover a range of topics related to the CSRD and its requirements.
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