The publication of LN 289 of 2015 brought to an end a long process that transposed the provisions in the Single Accounting directive applicable to small and medium-sized entities into law.
The requirements of the Single Accounting Directive were transposed into Maltese Law by amending the Companies Act and enacting the GAPSME LN 289 of 2015. The Directive forsees maximum harmonisation as far as thresholds and accounting obligations of small companies are concerned. Another change is directed towards the company size thresholds which have increased for small and medium sized companies. These newly set up thresholds, as set out below, are now harmonised across the EU.
Previously, under the version known as GAPSE, small entities still had a choice whether to draw up their annual financial statements in accordance with the simplified GAPSE framework or in accordance with IFRS as adopted by the EU.
In order for an entity to be classified in line with the thresholds noted above, the entity must be between any two of the thresholds outlined above for two consecutive years.
The primary objective of the Directive is to simplify the preparation of financial statements, reduce the burden on small companies and improve the comparability of financial statements. However, as set out in the table below, large and public interest entities are outside the scope of GAPSME and as a result accounting obligations vary from one classification to another: