Medium sized companies may be exempted from the full extent of the requirements relating to annual accounts in respect of any financial year if in respect of that year and the financial year immediately preceding that year the company satisfies two of the three following conditions:
|Balance sheet total not exceeding ||€7.62m|
|Turnover not exceeding||€15.24m|
|Employees not exceeding ||250|
(Section 8 Companies (Amendment) Act 1986, as amended by Regulation 4 European Communities (Accounts) Regulations 1993 refers.)
The fact that a company is entitled to an exemption on the basis of its size must be certified by its auditors.
Sections 11 and 12 Companies (Amendment) Act 1986 refer.
|Documents to be annexed to annual return ||Requirements as to signature/certification, etc|
|(i) copy of balance sheet and profit and loss account ||each signed on behalf of the directors by two directors|
|The copy balance sheet to contain a statement by the directors (immediately above their signatures) that|
|(a) they have relied on specific exemptions contained in sections 11 and 12 of the Act|
|(b) they have done so on the grounds that the company is entitled to the benefit of those exemptions as a medium-sized company;|
|(ii) copy of the report of the directors accompanying the balance sheet and profit and loss account ||to be certified both by a director and the secretary of the company to be a true copy of such report as laid before the AGM;|
|(iii) special report of the auditors under section 18(3) containing:||the special report to be certified both by a director and the secretary of the company to be a true copy of such report;|
|(a) a copy of the report of the auditors under section 18(4)||if the auditor's signature is original, the report does not need to be certified.|
(b) a copy of the report of the auditors to the members under section 193 of the 1990 Act.
Format of certification which is acceptable
(i) Report of the auditors under section 18(3) Companies (Amendment) Act 1986
To the directors of Example Limited
The following are copies of our report dated 31 March 20** under section 18(4) Companies (Amendment) Act 1986 to the directors of Example Limited and our report dated 26 February 20** under section 193 Companies Act 1990 to the members of that company for its financial year ended 31 December 20**.
(ii) Report of the auditors under section 18(4) Companies (Amendment) Act 1986
Auditor's Report to the directors of Example Limited pursuant to section 18(4) Companies (Amendment) Act 1986.
We have examined:
- the abridged financial statements for the year ended 31 December 20** on pages ...... to ...... which the directors of Example Limited propose to annex to the annual return of the company; and
- the financial statements to be laid before the Annual General Meeting which form the basis for those abridged financial statements.
The scope of our work for the purpose of this report was limited to confirming that the directors are entitled to annex abridged financial statements to the annual return and that those abridged financial statements have been properly prepared, pursuant to sections 11 to 12 Companies (Amendment) Act 1986, from the financial statements to be laid before the Annual General Meeting.
In our opinion the directors are entitled under section 18 Companies (Amendment) Act 1986 to annex to the annual return of the company abridged financial statements and those abridged financial statements have been properly prepared pursuant to the provisions of sections 11 to 12 of that Act (exemptions available to medium-sized companies).
Auditors: ABC & Company
Date: 31 March 20**
Note: Where in the auditors opinion the abridgement process has impaired the true and fair view given by the financial statements laid or to be laid before the Annual General Meeting, the following additional paragraph should be added by the auditors to this Report:
- In our opinion the abridged financial statements do not give a true and fair view because ..................... (outlining the auditors reservation/s).
(iii) Report of the auditors under section 193 Companies Act 1990
The auditor's report to the members is required to state:
- whether they have obtained all the information and explanations which, to the best of their knowledge and belief, are necessary for the purpose of their audit,
- whether, in their opinion, proper books of account have been kept by the company,
- whether, in their opinion, proper returns adequate for their audit have been received from branches of the company not visited by them,
- whether, the companys balance sheet and profit and loss account are in agreement with the books of account and returns,
- whether, in their opinion, the company's balance sheet and profit and loss account have been properly prepared in accordance with the provisions of the Companies Acts and give a true and fair view-
(i) in the case of the balance sheet, of the state of the company's affairs as at the end of its financial year,
(ii) in the case of the profit and loss account of the company's profit and loss for its financial year,
- whether, in their opinion, there existed at the balance sheet date a financial situation which under section 40(1) Companies (Amendment) Act 1983, would require the convening of an extraordinary general meeting of the company.
"Balance sheet total" is defined by section 8 (4) of the Companies (Amendment) Act, 1986 which states:
"Balance sheet total", in relation to any financial year of a company, means-
- (a) Where Format 1 of the balance sheet formats set out in the Schedule to this Act is adopted by the company, the aggregate of the amounts shown in the company’s balance sheet for that year under headings corresponding to items A (fixed assets) and B (current assets) in that Format,
- (b) Where Format 2 of those formats is adopted by the company, the aggregate of the amounts so shown under "Assets", and
- (c) Where the company prepares IFRS individual accounts, the aggregate of the amounts shown as assets in the balance sheet.
All relevant legislation can be downloaded from www.irishstatutebook.ie/. See Legislation Page.
We would recommend that you seek professional advice, or contact your professional association / accountancy body, if you have any queries on the format of accounts.
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