Requirements for company financial accounting reduced

Lithuania: Simplified requirements will apply for a newly distinguished “micro-companies’” group. This will cover most Lithuanian companies.

A company will be treated as a micro-company if at least two years in a row it does not exceed at least two of the following criteria:

  • Property value in the balance sheet — 350 000 EUR;
  • Net turnover per financial year — 700 000 EUR;
  • Average annual number of employees: 10.

Companies falling into this group will be able to prepare brief financial statements and will be released from the obligation to draft an explanatory note. Brief financial statements will cover a brief balance sheet and a brief profit (loss) report. Under a brief balance sheet a company will have to provide additional information about its financial commitments, the number of shares acquired and transferred, settlement of own shares acquired plus reasons for acquiring them, and other information set by law.

Companies may also opt not to apply these exemptions. Besides, certain companies are even restricted from using them, namely: financial holding companies, state and municipal companies, public interest companies, public limited liability companies and private limited liability companies whose prices (for goods or services) are regulated by law.

The amended Law on Company Financial Statements came into force on 1 July 2015. The first financial statements based on the amended law may be prepared for accounting periods from 1 January 2015 and later.

The amendments were adopted in line with Directive 2013/34/EU. This allows the choice whether to distinguish a group of micro-companies. Lithuania has opted for reducing the bureaucratic burden to a larger extent.

Source: Amendment to Law on Company Financial Statements of 14 May 2015 No. XII-1696

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