Financial statements for 2024

Financial statements for 2024 – simplifications for micro and small entities and new audit thresholds

The deadline for the preparation of the financial statements for the financial year ended 31 December 2024 is approaching. We would like to remind you that in accordance with the Accounting Act, the financial statements must be prepared by 31 March 2025 and then approved by the company’s shareholders by the end of June 2025. This is an obligation that may result in consequences, including financial sanctions, if not complied with. Therefore, it is worth making sure now whether the company can take advantage of the simplified rules for preparing financial statements, and whether its situation requires an audit by a statutory auditor.

Simplifications for micro and small units

Not all entities are required to prepare full financial statements. The Accounting Act provides for simplified rules for the so-called micro and small entities, which allows you to reduce formalities and reduce costs related to bookkeeping. The criteria for belonging to these categories are clearly defined.

A micro entity is a company that met at least two of the following three conditions both in the financial year and in the previous year:

• the total assets of the balance sheet at the end of the year did not exceed PLN 2 million,
• net revenues from the sale of goods and products were not higher than PLN 4 million,
• The average annual employment in full-time equivalents did not exceed 10 people.

If the company does not fall within these limits, but at the same time has not exceeded at least two of the three thresholds characteristic of small entities:

• total assets of the balance sheet at the end of the year did not exceed PLN 33 million,
• net revenues from the sale of goods and products were not higher than PLN 66 million,
• average annual employment in full-time equivalents did not exceed 50 people,

simplified report provided for this category.

Entities classified as micro or small entities may prepare a simplified balance sheet and a simplified profit and loss account, containing less detailed information than in the standard financial statements. In addition, these entities may limit the scope of additional information to the necessary elements indicated in the appendices to the Accounting Act, as well as benefit from the exemption from the obligation to prepare a report on the company’s operations.

It is worth noting, however, that the decision to apply the simplifications must be formally approved by the company’s shareholders. It cannot be a unilateral decision of the management board or accounting department – only the consent of the body approving the financial statements makes it possible to take advantage of the simplifications described above.

New thresholds for mandatory audits of financial statements

One of the important issues that should be taken into account when preparing financial statements is the obligation to have them audited by a statutory auditor. On 1 January 2025, regulations increasing the thresholds determining the need for an audit came into force. According to the new regulations, this obligation applies to companies that meet at least two of the following three conditions:

• total assets of the balance sheet will exceed EUR 3.125 million (previously EUR 2.5 million),
• net sales revenues will be higher than EUR 6.25 million (previously EUR 5 million),
• the average annual employment will be at least 50 employees (in this case, the threshold remains unchanged).

The new rules will apply to financial statements for the financial year starting on 1 January 2025, and companies must assess whether they meet the conditions for a mandatory audit, based on financial data for 2024. Raising the thresholds by 25% means that fewer entities will be obliged to audit the financial statements, which may be good news for some entrepreneurs.

To sum up, every company obliged to prepare financial statements for 2024 should already make sure now whether it can use simplified rules or whether it must prepare a full report. Entities that qualify as micro and small entities can significantly simplify their documentation, provided that the shareholders adopt an appropriate resolution on this matter. At the same time, companies approaching the statutory thresholds for mandatory auditing should check their financial data and prepare for the possible need to cooperate with a statutory auditor.