Raising the thresholds for company size categories

On 17 October 2023, the EU Commission issued a delegated act to raise the thresholds for the size classes of companies and groups. 

With the amending directive to the EU Accounting Directive, the previous monetary thresholds "balance sheet total" and "sales revenue", which are relevant for determining the size class of a company (Sections 267 f. HGB), will be adjusted for inflation and thus increased by approx. 25 %. The thresholds for the size-dependent exemption from the group accounting obligation (Section 293 HGB) will also be increased by 25%.

For example, the thresholds for large companies will be raised from EUR 20 million to EUR 25 million (balance sheet total) and EUR 40 million to EUR 50 million (sales revenue).

As the obligation to prepare a sustainability report in accordance with the CSRD is also linked to the size criteria for large corporations, the amendment also has an impact on the number of companies affected by the CSRD.

The amending directive also provides for a Member State option to allow companies to apply the new thresholds to financial years beginning on or after 1 January 2023. It remains to be seen whether Germany will exercise this option. Otherwise, the new thresholds must be applied for the first time to financial years beginning on or after 1 January 2024.

The amending directive has not yet entered into force. This will only take place on the third day after its publication in the Official Journal of the European Union, provided that the European Parliament or the Council of the EU do not raise any objections. The deadline for the review is generally 2 months after the adoption of the legal act.

The amending directive must be transposed into national law within twelve months of its entry into force.

The text of the delegated act can be downloaded here.