UGB: Adjustment of the thresholds for determining the size class and consolidated financial statements exemption
With the UGB Thresholds Regulation, the delegated act of the EU (Directive 2023/2775 of 17 October 2023), which provides for an increase in the monetary thresholds for total assets and revenue, was transformed into national law. The ordinance of the Federal Ministry of Justice on the new size categories of Sec 221 UGB and thresholds for group exemption pursuant to Sec 246 UGB came into force on 20 November 2024.
In view of the high inflation rates in recent years, many companies exceed the previously applicable size categories, which entail different, sometimes extensive obligations in connection with the preparation, auditing and disclosure of annual and consolidated financial statements. The obligation to prepare a (consolidated) sustainability report in accordance with the CSRD (Corporate Sustainability Reporting Directive) is also linked to the categorisation according to size classes.
On 20 November 2024, the UGB Threshold Values Ordinance was published in the Federal Law Gazette, thereby implementing the European Commission’s Delegated Directive (EU) 2023/2775 published in 2023 into Austrian law. The thresholds for total assets and sales revenue for determining the size class and for group exemption were adjusted by around 25 %. The thresholds relating to the number of employees remain unchanged.
Thresholds for determining the size category in accordance with Sec 211 UGB
| Size class | Total assets | Revenue | ⌀ Number of employees |
|---|---|---|---|
| Micro- Corporation | ≤ EUR 450,000 (prev: max EUR 350,000) | ≤ EUR 900,000 (prev: max EUR 700,000) | ≤ 10 |
| Small Corporation | > EUR 0.45 – 6.25 Mio (prev: max EUR 5 Mio) | > EUR 0.9 – 12.5 Mio (prev: max EUR 10 Mio) | > 10 – 50 |
| Medium-sized Corporation | > EUR 6.25 – 25 Mio (prev: max EUR 20 Mio) | > EUR 12.5 – 50 Mio (prev: max EUR 40 Mio) | > 51 – 250 |
| Large Corporation | > EUR 25 Mio (prev: > EUR 20 Mio) | > EUR 50 Mio (prev: > EUR 40 Mio) | > 250 |
Thresholds for consolidated financial statements exemption pursuant to Sec 246 UGB
| Upper limit | Gross method | Net method |
|---|---|---|
| Total assets | EUR 30 Mio (prev: EUR 24 Mio) | EUR 25 Mio (prev: EUR 20 Mio) |
| Revenue | EUR 60 Mio (prev: EUR 48 Mio) | EUR 50 Mio (prev: 40 Mio) |
If two of the three criteria are exceeded or not met on two consecutive reporting dates, the legal consequences of the new size category apply in the following year. Which two criteria are exceeded is not decisive. Separate regulations apply to special cases (e.g. reorganisations).
Entry into force
The amended thresholds apply to financial years beginning on or after 1 January 2024. For the occurrence or omission of the legal consequences stipulated in Sec 221 and Sec 246 UGB, the amended values must also be applied to observation periods prior to 1 January 2024.
Conclusio
Raising the thresholds allows companies to remain in a lower size category if necessary. This means that they will not be affected by the resulting increased expense in relation to the preparation, audit and disclosure of annual and consolidated financial statements. This is because there would be an impact, among other things, on:
- Scope, structure and content of the annual financial statements
- Mandatory disclosures in the notes
- Obligation to audit the financial statements
- Obligation to prepare consolidated financial statements
- Obligation to prepare a sustainability report in accordance with the CSRD
- Scope of disclosure in the company register
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