CSSF Communiqué: Publication of the Grand-ducal Regulation of 25 October 2024 on the Raising of Size Criteria for Companies and Q&A CNC 24/034
The CSSF would like to draw attention to the following publications:
1.The Grand-ducal Regulation of 25 October 2024(“RGD of 25 October 2024”) which was published in the Official Journalon 7 November 2024. The full text is available online via the following link: [Grand-ducal Regulation on Raising Size Criteria].
2.The CNC Q&A 24/034, titled “Raising of Size Criteria under Articles 35 and 47 of the LRCS and Article 1711-4 of the LSC: Practical Application Guidelines”. This document is accessible on the website of the Luxembourg Accounting Standards Commission (CNC) under the “Publications” section, sub-section “Doctrine”: [CNC Doctrine (cnc.lu)].
The RGD of 25 October 2024transposes into Luxembourg law Delegated Directive 2023/2775of the European Commission dated 17 October 2023, which raises the thresholds for classifying companies and groups. The balance sheet total and net turnover thresholds have been increased by 25%compared to the 2013 thresholds set by Directive 2013/34/EU, primarily to account for the high inflation of 2021 and 2022, and more generally to reflect price increases over the period from 2013 (when the Accounting Directive 2013/34/EU was adopted) to 2023. This marks the first upward adjustment of these thresholds since the directive's adoption.
Companies have the option to apply the new thresholds for financial years starting on or after 1 January 2023.
This upward revision of the thresholds is expected to reduce the administrative burden on companies and groups. As a result, certain large companies will be reclassified as medium-sized companies, exempting them from sustainability reporting obligations under Directive (EU) 2022/2464.
The Q&A CNC 24/034provides practical guidance for stakeholders on the implementation of these revised thresholds in Luxembourg. Given the option for companies to apply the new thresholds as of 1 January 2023(instead of 1 January 2024), the recategorisation of existing Luxembourg companies will take effect from the 2025 financial year.
Specifically, companies applying the new thresholds in FY 2023 must satisfy or exceed the size criteria for two consecutive financial years (the “repetition criterion”). Therefore, the earliest possible recategorisation of a company will occur in FY 2025, following the confirmation of the non-exceedance (or exceedance) of the thresholds for both FY 2023 and FY 2024.
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