An increase of limits in Polish accounting
Starting from 1 January 2025, the limits for bookkeeping and those related to audits of financial statements will be higher. The said change results from an amendment to the Accounting Act signed by the President of Poland on 16 April 2024 as well as an amendment to Directive 2013/34/EU of 17 October 2023 on annual and consolidated financial statements.
The current limits
The current limit for bookkeeping is EUR 2,000,000 of net revenue for the previous financial year. For the calculation of the limit in PLN, it is necessary to take into consideration the exchange rate published by the National Bank of Poland on the first working day of October of the previous year. The said limit will apply to natural persons, partners of private partnerships, partners of general partnerships of natural persons and professional partnerships as well as enterprises in inheritance (the limit does not apply to limited liability companies and joint-stock companies). The revenue limit includes the net revenue on sales, goods, products and financial transactions.
The current limits concerning audits of financial statements refer to entities which met at least two of the following conditions in the previous financial year for which the financial statement was drawn up:
| The amounts specified in Art. 64 section 1 point 4 of the Accounting Act |
| the average annual employment in full time equivalent units amounted at least 50 persons |
| the total of balance sheet assets at the end of the financial year amounted the equivalent in PLN of at least EUR 2,500,000 |
| the net revenue on sales of goods and products and on financial operations for the financial year amounted the equivalent in PLN of at least EUR 5,000,000 |
Above all, this refers to limited liability companies, general partnerships, professional partnerships, limited liability partnership, private partnerships and undertakings of natural persons.
The values in EUR are calculated according to the average exchange rate of EUR applicable on the last day of the financial year for which the statement will be drawn up.
One should bear in mind that certain entities (such as joint-stock companies, financial institutions, including banks) is subject to this obligation regardless of the amount of revenue. The catalogue of such entities has been presented in Art. 64 section 1 points 1–3 of the Accounting Act (Polish Journal of Laws of 2023, item 120 with amendments).
New limits starting from 2025
When it comes to the limit for bookkeeping, starting from 1 January 2025, it will be increased from EUR 2,000,000 to EUR 2,500,000 of net revenue for the previous financial year.
In the case of audits of financial statement, the limits regarding the obligation of submitting to audits of financial statements by a statutory auditor shall be increased by one fourth. In other words, the mandatory audits will apply to statements of other entities that, in the year preceding the year for which the financial statement was drawn up, met at least two of the following conditions:
- the total of balance sheet assets at the end of the financial year amounted the equivalent in PLN of at least EUR 3,125,000 (now: EUR 2,500,000),
- their net revenue on sales of goods and products and on financial operations for the financial year amounted the equivalent in PLN of at least EUR 6,250,000 (now: EUR 5,000,000),
- the average annual employment at such entities in full time equivalent units amounted at least 50 persons (this condition shall remain unchanged).
Other simplification until 1 January 2025
An increase of 25% will also apply to thresholds the exceeding of which determines whether the company is classified (for bookkeeping purposes) as a micro, small, medium or large entity. Among others, the said thresholds refer to the balance sheet amount and the net revenue.
So, for example, a small company will be an entity that does not classify as a micro-entity and that, during the financial year for which the financial statement is drawn up and in the preceding year did not exceed at least two of the following:
PLN 33,000,000 (the current limit is PLN 25,500,000) – in the case of the total of balance sheet assets at the end of the financial year,
PLN 66,000,000 (now: PLN 50,000,000) – in case of net revenue on sales of goods and products for the financial year,
50 persons – in case of an average annual employment in full time equivalent units (this condition remains unchanged).
After the change, only entities classified as micro and small will be allowed to:
- classify financial leasing agreements according to the criteria of tax law instead of the accounting act,
- refrain from establishing deferred income tax reserves and assets,
- apply a simplified method of calculation of the cost of product manufacturing.
The changes regarding simplification shall apply for the first time to statements drawn up for the financial year that started after 31 December 2023. It results from the planned transitional provision (Art. 10 section 3 of the amendment).
Author: Natalia Pietrasik, accountant at the MDDP Outsourcing office in Warsaw
Sources:
https://www.prezydent.pl/aktualnosci/wydarzenia/prezydent-podpisal-ustawe,84098
