{"id":15465,"date":"2025-09-17T08:52:45","date_gmt":"2025-09-17T08:52:45","guid":{"rendered":"https:\/\/axevera.com\/?p=15465"},"modified":"2025-09-17T08:52:46","modified_gmt":"2025-09-17T08:52:46","slug":"accounting-law-new-classification-of-entities-and-higher-audit-thresholds","status":"publish","type":"post","link":"https:\/\/axevera.com\/en\/2025\/09\/17\/accounting-law-new-classification-of-entities-and-higher-audit-thresholds\/","title":{"rendered":"Accounting Law: New Classification of Entities and Higher Audit Thresholds"},"content":{"rendered":"\n<h1 class=\"wp-block-heading\"><\/h1>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>A Strategic Adjustment in Line with the EU<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">One of the most significant changes introduced by the recent amendment to the <strong>Czech Accounting Law<\/strong> concerns the redefinition of the classification of accounting entities. This update stems from the need to align national legislation with European standards, in particular with Commission Directive (EU) 2023\/2775, and reflects the effects of inflation accumulated over the past ten years. The classification is a fundamental pillar because it determines companies\u2019 obligations regarding financial statements, audits, and the disclosure of non-financial (ESG) data. Consequently, the reform has a direct impact on thousands of businesses operating in the market.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>New Classification Thresholds<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The amendment increases the thresholds related to assets and net turnover, while keeping unchanged the maximum number of employees for each category. The new thresholds are defined as follows:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Micro entities<\/strong>: assets up to CZK 11 million (previously CZK 9 million) and turnover up to CZK 22 million (previously CZK 18 million), with up to 10 employees.<br><\/li>\n\n\n\n<li><strong>Small entities<\/strong>: assets up to CZK 120 million (previously CZK 100 million) and turnover up to CZK 240 million (previously CZK 200 million), with up to 50 employees.<br><\/li>\n\n\n\n<li><strong>Medium entities<\/strong>: assets up to CZK 600 million (previously CZK 500 million) and turnover up to CZK 1.2 billion (previously CZK 1 billion), with up to 250 employees.<br><\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The increase in thresholds means that many companies will now fall into less demanding regimes, with reduced disclosure and consolidation obligations.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Consolidation and Transitional Rules<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The new thresholds also affect the consolidation of accounting groups, reducing obligations for smaller groups. The revised limits apply to accounting periods beginning on or after <strong>1 January 2024<\/strong>, with the option of choice for companies with a shortened accounting period in the same year.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A key element is the so-called two-year test, which stipulates that a change of category occurs only if the limits are exceeded or not exceeded in two consecutive accounting periods. This mechanism prevents shifts between categories caused by extraordinary and non-structural events.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Higher Thresholds for Statutory Audits<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Another relevant change concerns the statutory audit requirement. From now on, only medium and large entities will be subject to mandatory audits if they exceed at least two of the following three thresholds in two consecutive accounting periods:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Assets: CZK 120 million (previously CZK 40 million)<br><\/li>\n\n\n\n<li>Turnover: CZK 240 million (previously CZK 80 million)<br><\/li>\n\n\n\n<li>Employees: 50 (unchanged)<br><\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The threefold increase of two of the key parameters excludes approximately 10,000 accounting entities from the obligation, providing significant relief in terms of administrative and financial costs. The new rules will apply to financial statements beginning in 2026, while 2024 and 2025 will remain under the previous regime.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Impact on Companies<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The introduced changes substantially reshape the architecture of accounting and auditing regulation. For companies, this means carefully reviewing their classification, assessing possible changes in obligations related to financial statements, audits, or consolidation, and ensuring the correct application of the updated criteria. Careful management of the new parameters is essential to avoid interpretative uncertainties, especially during the transition phase between the old and new limits.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Accounting Law 2024: higher thresholds for micro, small and medium-sized enterprises, simplified audit requirements and EU alignment.<\/p>\n","protected":false},"author":5,"featured_media":15462,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[525],"tags":[],"yst_prominent_words":[],"class_list":["post-15465","post","type-post","status-publish","format-standard","has-post-thumbnail","category-en"],"_links":{"self":[{"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/posts\/15465","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/comments?post=15465"}],"version-history":[{"count":1,"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/posts\/15465\/revisions"}],"predecessor-version":[{"id":15466,"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/posts\/15465\/revisions\/15466"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/media\/15462"}],"wp:attachment":[{"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/media?parent=15465"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/categories?post=15465"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/tags?post=15465"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/yst_prominent_words?post=15465"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}