Exemption from requirement to prepare group financial statements Exemption from consolidation: section 293 Companies Act 2014 as amended by section 19 Companies (Accounting) Act 2017- for financial years beginning on or after 1 January 2017.
A holding company that qualifies for the small company regime under section 280B or the micro company regime under section 280E shall be exempt from the requirement to prepare group financial statements.
In this case, the following documents must be filed with the subsidiary company’s annual return, pursuant to section 294 Companies Act 2014: 1.
It requires a certified copy of group financial statements drawn up by the holding undertaking to be annexed to the annual return of the holding undertaking.Goodwill is accounted for under the provisions in FRS 10 .The rebuttable presumption in FRS 10 (specifically paragraph 19) is that the useful economic life of purchased goodwill and intangible assets are limited to periods of twenty years or less.There is a further exemption under section 300 Companies Act 2014, being an exemption from the requirement to prepare group financial statements for a holding undertaking which is a fully or 50 per cent owned subsidiary undertaking of an EEA undertaking. This may be availed of by a holding undertaking which is itself a subsidiary undertaking of another undertaking established under the law of a non EEA Member State whose shareholders or members holding an aggregate of 50 per cent of the shares in the holding undertaking and notice requesting the preparation of group financial statements has not served on the company, at least 6 months before the end of the financial year of that undertaking.This exemption is not limited to private companies so a plc which meets the section 299 conditions may avail of it, but section 1377 Companies Act 2014 provides the exemption does not apply to a holding undertaking any of whose shares, debentures or other debt securities have been admitted to trading on a regulated market in an EEA Member State. A listed plc, is not entitled to avail of any of the three exemptions, and so must always prepare and file the group financial statements with its annual return.So unless a holding undertaking is entitled to avail of the exemptions under Chapter 5 Part 6 of the Companies Act 2014, it is obliged to annex the group financial statements to its annual return when filing same in CRO.A group can be exempted under the Audit Exemption (section 358(2)) where requirements are met.A holding company can be exempt from filing consolidated group Financial Statements if it meets 2 of the following conditions. The balance sheet total of holding company and subsidiaries taken as a whole does not exceed €6m net (or €7.2m gross) 2.The amount of turnover of the holding company and subsidiaries taken as a whole does not exceed €12m net (or €14.4m gross) 3.Those qualifying conditions are— “Balance sheet total”, in relation to a company or undertaking, means the aggregate of the amounts shown as assets in the company’s or undertaking’s balance sheet.“amount of the turnover”, in relation to a company or undertaking, means the amount of the turnover shown in the company’s or undertaking’s profit and loss account.