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The Financial Reporting Council (FRC) has published FRED 87 Draft amendments to FRS 102  The Financial Reporting Standard applicable in the UK and Republic of Ireland. FRED 87 proposes amendments to FRS 102 to reflect recent amendments to IAS 1 Presentation of Financial Statements and the subsequent replacement of IAS 1 with IFRS 18 Presentation and Disclosure in Financial Statements. Specifically, it proposes changes to the prescribed formats for balance sheet and profit and loss accounts where an entity applying FRS 102 uses the option to adapt the presentation format. The changes are proposed to maintain the existing level of alignment with IFRS 18 and IAS 1. Entities that choose not to adapt their financial statements under FRS 102 will not be impacted by the proposed amendments. FRED 87 remains open for public comment until 10 October 2025.

Minister Burke has signed into law Statutory Instrument S.I. No. 309/2025- European Union (Corporate Sustainability Reporting) Regulations 2025. The purpose of this Statutory Instrument (S.I.) is to transpose the ‘stop the clock’ EU Directive into Irish law and to amend the anomalies that were present in previous S.I.s relating to the transposition of the Corporate Sustainability Reporting Directive (CSRD) in Ireland.   By way of background the Corporate Sustainability Reporting Directive (CSRD) became law in 2023, and it was transposed into Irish law in July 2024 by virtue of S.I. No. 336/2024 - European Union (Corporate Sustainability Reporting) Regulations 2024 (and subsequently S.I. No. 498/2024 - European Union (Corporate Sustainability Reporting) (No. 2) Regulations 2024, which amended some of the previous legislation)  There were a number of anomalies in these regulations which caused concern and challenges for businesses implementing the CSRD. The Institute, along with other professional bodies and law firms, made numerous representations to the Department of Enterprise, Tourism and Employment outlining the amendments that were required to give clarity on the implementation of the CSRD. The ‘wave 1’ reporters which were subject to the CSRD published their first sustainability statements earlier this year. Just as they were being published the European Commission published their ‘omnibus simplification package’ the purpose of which is to simplify sustainability reporting, and it also included a proposal to ‘stop the clock’ by delaying the commencement of reporting obligations by two years for the majority of companies.   The current state of play  Minister Burke recently published statutory instrument S.I. 309/2025, European Union (Corporate Sustainability Reporting) Regulations 2025 to transpose these changes into Irish law.   A summary of the changes are as follows:  ‘Stop the clock’: The S.I. transposes this EU Directive into Irish law and delays the application of the CSRD for the majority of Irish companies (wave 2 and wave 3) by two years. Large Irish incorporated entities will publish their first report in 2028 based on data for the 2027 financial year. SMEs with securities listed on an EU regulated market, small and non-complex institutions, captive insurance and reinsurance undertakings will issue their first reports in 2029 based on data for the 2028 financial year.  Definition of net turnover: The definition of ‘net turnover’, which is one of the thresholds for determining if a company is in scope for CSRD reporting, has been amended. The initial definition of turnover was broader in scope and for companies whose ordinary activities included the making or holding of investments, the gross revenue derived from such activities. Therefore, there were a number of companies, primarily in the funds sector and Special Purpose Vehicles, which were captured which may not otherwise have fallen within scope of the CSRD. The revised definition aligns more closely with the definition of ‘net turnover’ under the EU Accounting Directive.  Ineligible entities: Under the original S.I. relating to the CSRD, there was confusion in Ireland regarding  ‘ineligible entities’ and if they were potentially in scope for CSRD reporting irrespective of their size. The revised regulations expressly exclude these from scope and ‘ineligible entities’ are only in scope for the CSRD if they meet the CSRD thresholds.  Subsidiary exemptions: There was uncertainty under the original transposition as to whether or not an Irish subsidiary could claim a subsidiary exemption if its sustainability information was included in the consolidated report of an EU parent company. In the revised regulations the provisions on subsidiary exemptions have been expanded, consistent with the CSRD, so that an Irish in-scope company may be exempt from preparing its own sustainability report where the information is included in the report of an EU parent, drawn up in accordance with the consolidated sustainability reporting obligations of the EU Accounting Directive, as amended by the CSRD.  Ultimate parent company reporting: There was, in the initial CSRD regulations, the potential that all non-EEA parent companies of certain Irish companies had to prepare a sustainability report, and not just the ‘ultimate parent company’. The revised regulations have provided clarification on this matter and there is a new definition of ‘ultimate parent company’, and only that company now must prepare a report. The timeframe has not been amended by the revised regulations, and reporting obligations in respect of non-EEA undertakings apply beginning on or after 1 January 2028.

Minister Burke has announced the commencement of Section 22 of the Companies (Corporate Governance, Enforcement and Regulatory Provisions) Act 2024.  This provision relates to a change to the current audit exemption regime, whereby small and micro sized companies will not, in future, automatically lose the privilege of audit exemption on a first occasion, in a five-year period, of late filing of an annual return with the Companies Registration Office. Section 22 will replace section 363 of the Companies Act 2014. Section 363 in summary provided that if a company failed to submit an annual return it would lose its audit exemption for the succeeding two years. Section 22 amends this and introduces a graduated regime which means that audit exemption will only be lost if a company files its annual return late more than once in a five-year period. Section 22 also provides that a company’s first annual return or previous failure to file an annual return before the commencement of the provision (as the company has already lost its audit exemption) shall not be considered a previous failure. This is a matter that we have made numerous representations on for the last number of years. While we advise members to file on time, there will be genuine reasons why a filing deadline is missed and commencing this provision should reduce the burden on those companies.   It is great to see the commencement of this piece of legislation before the peak filing season commences which will give clarity to members who may need to benefit from it.   Please see the press release here. Please see the DETE press release here and a notice from the CRO.