Beware of job offer scams: Accace does not recruit via Telegram, WhatsApp or similar channels. All official job listings are published only on official Accace websites, verified social profiles (LinkedIn, Facebook, Instagram) and trusted job portals.
Return to the Newsroom
Mailchimp - subscribe form sidebar

Higher size limits for accounting units and their ESG impact in Slovakia | News Flash

October 24, 2024

On April 24, 2024, the National Council of the Slovak Republic approved an amendment to Act No. 431/2002 on Accounting, which transposed European directives regarding corporate sustainability reporting (the so-called CSRD Directive) and adjusted the size criteria for micro, small, medium, and large enterprises or groups. The amendment came into effect on June 1, 2024, affecting therefore accounting units and their ESG impact in Slovakia.

Download article as PDF, or read more below

Change in size criteria

The obligation to classify accounting entities into size groups—micro, small, and large accounting units — is stipulated in § 2, paragraphs 5 to 15 of the Accounting Act. The amendment to the Accounting Act adjusts the thresholds for the individual size criteria to prevent companies from being subject to stricter requirements, as applied to large entities, due to the effects of inflation.

Size criteriaAmount of net assets (in EUR)Net turnover (in EUR)Average recalculated number of employees
Present statusCHANGEPresent statusCHANGEPresent statusCHANGE
Micro accounting unitup to 350 thous.up to 450 thous.up to 700 thous.up to 900 thous.up to 10up to 10
Small accounting unitup to 4 mil.up to 5 mil.up to 8 mil.up to 10 mil.up to 50up to 50
Large accounting unitmore than 4 mil.more than 5 mil.more than 8 mil.more than 10 mil.more than 50more than 50
Big enterprise under the Accounting Directive*more than 20 mil.more than 25 mil.more than 40 mil.more than 50 mil.more than 250more than 250
*entities with a sustainability reporting obligation

Sustainability Reporting (so-called ESG Reporting)

The most significant change is the introduction of mandatory sustainability reporting (known as ESG reporting). The goal of the CSRD directive in the area of ESG reporting is to provide a clearer picture of corporate social responsibility, prevent the uncontrolled publication of embellished information about how companies approach sustainability, and ensure that relevant information is presented with the required quality and structure. The intention is also to gradually elevate non-financial reporting to the same level as financial reporting. Last but not least, the aim is to provide relevant information to all

stakeholders interested in sustainability, such as suppliers, customers, financial institutions (banks, insurance companies, etc.), investors, employees, and the general public.

Companies must include information in their ESG reports (sustainability reports) that is necessary to understand their impact on sustainability aspects, as well as their plans and goals aimed at reducing global warming and achieving climate neutrality, in accordance with the CSRD directive.

Affected entities

The obligation to report sustainability information applies to accounting entities defined in:

  • Section 20c, paragraphs 1 and 2 of the Accounting Act – for individual sustainability reporting
  • Section 20g, paragraphs 1 and 2 of the Accounting Act – for consolidated sustainability reporting

The mandatory entities required to report information on sustainability include the following accounting units:

  • Banks, excluding the National Bank of Slovakia,
  • Insurance companies and reinsurers,
  • Commercial companies (joint-stock companies, limited liability companies, limited partnerships, public partnerships, and simple joint-stock companies), provided they meet the size criteria, with a distinction made as to whether they are issuers (i.e., accounting units that have issued securities that have been accepted for trading on a regulated market in a member state).

The obligation to report applies to accounting entities that meet the following size criteria:

  • From January 1, 2025, all large accounting entities (both issuers and non-issuers) — large accounting entities as defined by the accounting directive (“large enterprises”), meaning entities that have met at least two of the following conditions in each of the two immediately preceding accounting periods:
  • net assets exceeding €25 million,
  • net turnover exceeding €50 million,
  • average calculated number of employees exceeding 250.
  • From January 1, 2026, small and medium-sized accounting entities that are issuers  of securities (excluding micro accounting entities), and
  • From January 1, 2028, large subsidiary accounting entities whose ultimate parent entity is based outside the EU.

The first individual reporting of sustainability information for the accounting period starting January 1, 2024, applies to:

  • banks, insurance companies, reinsurance companies, and business entities—issuers of securities whose average converted number of employees exceeded 500, provided that in each of the two immediately preceding accounting periods, they met at least one of the following conditions:
Size criteriaAccounting period 2023Accounting period 2022
Net assets (in EUR)more than 25 mil.more than 20 mil.
Net turnover (in EUR)more than 50 mil.more than 40 mil.

The first consolidated reporting of sustainability information for the accounting period starting January 1, 2024, applies to:

  • Banks, insurance companies, reinsurance companies, and business entities – issuers of securities whose average calculated number of employees exceeds 500, if in each of the two immediately preceding accounting periods they met at least one of the following conditions:

a) based on the individual financial statements of the parent accounting unit and all its subsidiary accounting units:

Size criteriaAccounting period 2023Accounting period 2022
Net assets (in EUR)more than 30 mil.more than 24 mil.
Net turnover (in EUR)more than 60 mil.more than 48 mil.

b) for the consolidated entity after the consolidation of capital, mutual relationships between accounting units, profit and loss, costs, and revenues:

Size criteriaAccounting period 2023Accounting period 2022
Net assets (in EUR)more than 25 mil.more than 20 mil.
Net turnover (in EUR)more than 50 mil.more than 40 mil.

Exemption from the preparation of the ESG report

Subsidiaries may apply for an exemption from ESG reporting if they are included in the consolidated annual report of the parent accounting entity (whether based in the EU or outside the EU), provided that the consolidated annual report is prepared and published in accordance with the requirements of the CSRD directive. This includes ensuring that the reported information complies with ESRS standards or is equivalent to these standards, is in the prescribed electronic format, is digitally tagged in accordance with the relevant regulation, and meets the requirements of the EU taxonomy.

A subsidiary applying for this exemption must state in its annual report:

  • The name and registered office of the parent accounting entity that prepares the consolidated annual report, which includes information about this subsidiary.
  • A reference to the website where the consolidated annual report of the parent accounting entity and the assurance report (document with an opinion) regarding the sustainability reporting information are accessible.
  • Information indicating that it is utilizing the exemption from the obligation to report sustainability information.

In the case of a parent accounting entity based outside the EU, the subsidiary is required to publish a consolidated annual report and a document containing an opinion regarding assurance in the area of sustainability reporting in the Register of Financial Statements.

This exemption cannot be utilized by large subsidiary accounting entities that are listed on the stock exchange (issuers of securities).

Method of ESG reporting

The ESG report (sustainability report) is presented in a separate section of the annual report, which also includes the auditor’s opinion on the assurance related to sustainability reporting. The publication of annual reports will follow a unified electronic reporting format in accordance with Commission Delegated Regulation (EU) 2019/815 – the “XHTML” format – and will also involve the digital tagging of sustainability information (for machine readability of data, allowing for comparability).

The obligation to submit the sustainability report to the Register of Financial Statements is within 12 months after the end of the accounting period for which the report is prepared.

Assurance of the ESG Report

An accounting entity required to report on ESG is obligated to ensure that its reporting is subject to assurance by a statutory auditor who holds a specific license in the area of sustainability. The accounting entity may also choose a different statutory auditor than the one who verifies the financial information in the annual report.

In this context, it is important to note that preparing the ESG report according to the ESRS standards is a time-consuming process, primarily due to the labor-intensive nature of data collection. We therefore recommend that all companies address this obligation well in advance.

If you have any questions regarding ESG obligations, please do not hesitate to contact us.

Martina Paprčková
Tax Manager | Accace Slovakia
Get in touch with us
Mailchimp - subscribe form sidebar
downloadcrosschevron-leftarrow-leftarrow-right