The Companies (Accounting) Act 2017 (the “2017 Act”) is a sizeable piece of legislation. It makes many new changes to the Companies Act 2014 (the “2014 Act”). The majority of these changes impact on the form, content and filings of annual and consolidated financial statements. A commencement order will bring the 2017 Act into operation. Some of the notable changes introduced by the 2017 Act include:

Accounting Related Changes

The majority of the Act amends Part 6 of the 2014 Act and its related schedules. These amendments will introduce changes to the preparation and governance of financial statements, the audit of Irish companies and the filing of annual returns.

Micro companies

Less burdensome accounting compliance requirements will be introduced for smaller companies that qualify as ‘micro’ companies. The following types of companies cannot qualify as micro companies:

  • an investment company;
  • a financial holding undertaking;
  • a holding company that prepares group financial statements; or
  • a subsidiary that is included in the consolidated financial statements of a higher holding undertaking.

Disclosures in financial statements

Micro and small sized companies will be exempt from certain disclosures in their financial statements with more extensive disclosure exemptions for micro companies, including an exemption from disclosing details of directors' remuneration.

New thresholds

In addition, changes are proposed for the criteria for companies to qualify as ‘small’ and ‘medium’ sized companies. To qualify for a category, a company must not exceed two of the three thresholds set out in the table below. The new proposed thresholds are a significant increase from the existing thresholds applicable to ‘small’ and ‘medium’ companies. For comparison, the existing thresholds are set out in bold in the table below.

Click here to view the table.

Abridged financial statements and the audit exemption

The 2017 Act removes the exemption available to medium sized companies from filing abridged financial statements. As a result, they must file full financial statements. The revised small company thresholds will be the criteria for abridgement of financial statements. These revised small company thresholds also apply when deciding whether a company can avail of the audit exemption.

Relevant financial period

The 2017 Act allows certain companies to elect to adopt the new accounting provisions for financial years commencing on or after 1 January 2015.

New obligations for funds

A new obligation is introduced which provides that investment companies and UCITS registered under the 2014 Act must file financial statements and directors’ reports in the Companies Registrations Office (the “CRO”).

End of ‘Non-Filing Structures’

The scope for unlimited companies to avoid filing financial statements will be reduced significantly. Under the 2014 Act, only certain designated unlimited companies (a “Designated ULC”) are obliged to file financial statements in the CRO. Irish unlimited companies, with at least one member being a non-EEA incorporated unlimited liability company, fall outside the definition of a Designated ULC. Therefore, they are not presently required to file financial statements. Many Irish groups of companies have availed of this exemption to put in place what is known as a ‘non-filing structure’. Non-filing structures involve inserting non-EEA companies into the group structure. This is done in order to avail of the exemption from the requirement to file accounts while retaining limited liability status for the group’s members.

However, due to the amended and much broader definition of “Designated ULC” introduced under the 2017 Act, unlimited companies with a typical existing non-filing structure in place will fall within the scope of the definition. Unlimited companies, as a result, will be required to file financial statements in the CRO. It is expected that this change will come into effect for financial periods beginning on or after 1 January 2017. It is likely this will be clarified in the commencement order. Irrespective of the operative financial periods, companies with non-filing structures should bear in mind when filing financial statements that the previous year’s figures must be included in the financial statements as comparator figures in the usual way. This information will, therefore, become publicly available.

The 2017 Act also introduces the requirement for unlimited companies with a limited liability subsidiary to file financial statements for financial years on or after 1 January 2022.

Unlimited Company Name

Under the 2014 Act, the registered names of all unlimited companies are required to end in “unlimited company”, “UC/U.C.” or the Irish language equivalents. The 2014 Act gives the Minister for Jobs, Enterprise and Innovation the power to exempt a company from ending its name accordingly in special circumstances. The 2017 Act removes this exemption. However, any companies that were granted the ministerial exemption prior to the commencement of the Act will not be affected.

Definition of Branch Expanded

Part 21 of the 2014 Act applies to foreign limited liability bodies corporate that “establish a branch” in Ireland. These foreign companies are required to file certain information and documents with the CRO. They are also required to file accounts every year. The definition of ‘branch’ is amended under the 2017 Act to include any foreign undertaking whose members’ liability is unlimited and which is a subsidiary undertaking of a body corporate whose members have limited liability. This change will require many more foreign entities to comply with Part 21 of the 2014 Act.

Disclosure of Payments to Governments by companies in the Mining, Extractive or Logging Industries

New provisions require certain companies in the mining or extractive industries or the logging of primary forests to prepare and file annual reports on payments made to governments with the CRO.

Companies Act 2014 Anomalies and Technical Issues Fixed

Since the 2014 Act came into operation, numerous issues have arisen concerning anomalies and technical issues identified as arising under the 2014 Act. The 2017 Act addresses some of these issues. It is anticipated that the Statutory Audits Bill will fix more anomalies and issues identified under the 2014 Act. The anomalies and technical issues addressed in the 2017 Act include:

Debts securities admitted to trading or listed

The 2017 Act clarifies the position concerning private companies limited by shares which converted to an LTD under the 2014 Act which had debt securities that were validly admitted to trading or listed before 1 June 2015. It provides that restrictions under the 2014 Act are only applicable to LTDs which have debt securities trading or listed after 1 June 2015.

Merger relief

Under the 2014 Act, merger relief is only available to transactions involving two Irish companies. The relevant section provides that where an Irish company acquires 90% or a greater interest in an Irish company in exchange for the allotment of shares issued at a premium then the issuing company is relieved from transferring the share premium to its share premium account. Under the 2017 Act, the merger relief section is amended to include transactions where the acquired company is a body corporate, which includes foreign companies.

Financial services related fixes

Click here to view a related article which explains in more detail the financial services fixes covered under the 2017 Act. These fixes relate to:

  • a correction to the definition of credit institution;
  • a fix to the language dealing with charges over non-Irish shares; and

the implementation of the Company Law Review Group Report on the Belgard Motors case, so as to prevent automatic crystallisation of floating charges.


Companies should consider and understand how the 2017 Act will impact on them. It is likely that the main changes to companies will relate to the preparation and governance of financial statements, their audits and the filing of annual returns.