Companies Act 2014 Summary of main changes to Financial Statements.

The Companies Act 2014 (Commencement) Order 2015 (SI 169/2015) (the Order) was signed by
Minister Richard Bruton on 1 May 2015 and most sections of the Act commenced on the 1 June 2014.
The Act results in changes in Company financial statements.
The main Changes required in financial statements as a result of Companies Act 2014 are summarised
below.
Directors report
a) Show persons who were directors of the company at any time during the financial year.
b) Directors and secretary and their interests in share capital of the company must now be shown
in the directors report and not in a note. As this information is now provided in the directors
report the abridged financial statements of a small company will not have this information in
a note. Therefore, you must attach to the Form B 1 (annual return) an extract from the
directors report providing information in accordance with section 329 of the Act in relation to
directors and secretarys interests in the shares of the company.
c) Change old proper books of account wording to something like the following:
d) Accounting Records - The measures taken by the directors to secure compliance with the
requirements of sections 281 to 285 of the Companies Act 2014 with regard to the keeping of
accounting records are the implementation of necessary policies and procedures for recording
transactions, the employment of qualified accounting staff and the maintenance of an
effective information management system. The accounting records of the company are
maintained at xxxxxx.
e) Do not use phrase proper books of account use accounting records.
Directors Responsibilities statement
Directors Responsibilities statement should be changed to reflect the commencement of the
Companies Act 2014.
Financial year end
There is a view that you should always use financial year ended in place of year ended. Some of the
big four accounting firms are of this opinion.
Profit & Loss Account
The directors do not need to sign the Profit & Loss account but I presume that if they do so it is not a
crime...
Audit exemption statement to be included on the company balance sheet where audit exemption
was claimed.
We, as Directors of XYX Limited, state that:
I.
the company is availing itself of the audit exemption - the exemption provided for by Chapter
15 of Part 6 of the Companies Act 2014;
II.
the company is availing itself of the exemption on the grounds that section 358 is complied
with;
III.
no notice under subsection (1) of section 334 has, in accordance with subsection (2) of that
section, been served on the company; and
IV.
the directors acknowledge the obligations of the company, under the Companies Act 2014 to
keep adequate accounting records and prepare financial statements which give a true and fair
view of the assets, liabilities and financial position of the company at the end of its financial
year and of its profit or loss for that financial year, and otherwise comply with the provisions
of the Companies Act 2014 relating to financial statements so far as they are applicable to the
company.
Approved by the board of directors and signed on its behalf by:
Director _____________
Director _____________

Date____________
Date ____________

Companies Act 2014 Summary of main changes to Financial Statements.

Employee note
Include the additional line below if applicable:
Other compensation costs
Fixed asset note
Include a fixed asset note for the current year and prior year. This rule applies to all profit &loss
account and balance sheet notes. This requirement arises due to drafting issue in the Act.
Audit assignments
The reference to the reappointment of the auditor in the directors report will change to the applicable
reference in the 2014 act.
The wording of the audit report will change. See appendix 1 for extract from technical release on this
matter.
Payment terms
New requirement to disclose the terms of payment or repayment, and the rate of any interest payable
on debts both repayable and not repayable by instalment (unless the number of debts is such that in
the opinion of the directors it would result in a statement of excessive length, in which case it is
sufficient to give a general indication of the terms of payment or repayment and the rates of any
interest payable). This applies to creditors falling due within one year and after one year
Example:
The repayment terms of trade creditors vary between on demand and ninety days. Trade creditors do
not attract interest. The bank overdraft is repayable on demand and incurs an annualised interest rate
of 10% of the daily overdrawn balance. The bank loans are repayable by instalments over periods
between five and ten years. The loans incur interest at an annualised rate of 12%. The bank debts are
secured by a fixed charge on the companys land and buildings. Taxes are subject to the terms of the
relevant legislation. Interest accrues on late payment at the rate of x% per month. The terms of the
accruals vary.
Small company size/ abridgement exemption statements:
A company claiming the size/ abridgement exemption must file the Auditors Report to the
directors and must state the following on their Balance Sheet:
I/We, as director(s) of (company name), state that The company has relied on the specified exemption contained in section 352 Companies Act 2014;
the company has done so on the grounds that it is entitled to the benefit of that exemption as a
small company and confirm that the abridged Financial Statements have been properly prepared
in accordance with section 353 Companies Act 2014.
On behalf of the board:

Director ___________

Director ___________
Audit report on full financial statements and audit report on abridged financial statements
The audit report on the shareholder financial statements and the abridged financial statements has
changed and the revised wording can be found in Technical Release 03/2015 available at
www.charteredaccountants.ie/en/Members/Technical/Technical-Releases-and-TechnicalAlerts/Technical-Releases-2015/ Note the change in structure of the report to the directors on
abridged financial statements.

Companies Act 2014 Summary of main changes to Financial Statements.

Claiming audit exemption and abridgment
When claiming both audit exemption and size/ abridgement exemption remember to add the following
to the audit exemption statement on the balance sheet:
V.

the company has relied on the specified exemption contained in s.352 Companies Act
2014; has done so on the grounds that the company is entitled to the benefit of that
exemption as a small company and the abridged Financial Statements have been
properly prepared in accordance with s.353 Companies Act 2014.

(If a medium sized company change section 353 to 354).

Tables of Origins and Destinations for the Companies Act 2014

The Department of Jobs, Enterprise and Innovation have published a Table of Origins and a
Table of Destinations for the Companies Act 2014. This can be found at:
www.djei.ie/commerce/companiesact2014.htm
Guidelines are provided with the Tables to assist in fully understanding and using them
correctly.