ENTITY STATUS AND REPORTING OBLIGATIONS
The size of an economic entity - micro, small, medium or large - is not just a label. It is a key factor affecting the scope of reporting obligations.
According to the Accounting Act, entity statusis determined based on the following criteria:
To qualify for a given category, an entity must meet at least two of the three criteria.
Reporting obligations for individual entities:
• Micro entities may prepare simplified reports – often only general information, balance sheet (along with supplementary information to the balance sheet) and profit and loss account, without additional information.
• Small entities are required to prepare an introduction to financial statements, balance sheet, profit and loss account and additional information, but in a simplified version.
• Medium and large entities must prepare full financial statements, including an introduction to financial statements, balance sheet, profit and loss account, statement of changes in equity, cash flow statement and extensive additional information. Additionally, medium and large entities are subject to mandatory audit by a statutory auditor and publication in the Court and Economic Monitor.
It is worth remembering that in addition to entity status under the Accounting Act, enterprises may have different status also under the Goods and Services Tax Act (VAT).
Here, sales revenue (turnover) is decisive, not assets or employment.
The thresholds specified in the VAT Act are of a tax nature and are not identical to the classification of entities under the Accounting Act.
Need help with entity classification or preparing a report – contact our accounting office. We will help you through every stage in accordance with current regulations.
biuro@fengo.pl www.fengo.pl/biuro accounting
