Italian Financial Statement 2024: Changes to the Thresholds for Preparing Abbreviated and Micro Financial Statements

published on 11 December 2024 | reading time approx. 2 minutes

The size thresholds that allow a company to be classified as micro, small, or large have been increased by 25 percent.

Legislative Decree No. 125 of September 6, 2024, implementing Directive 2022/2464/EU, has increased the size limits for preparing abbreviated and micro financial statements, as well as for exemption from the obligation to prepare consolidated financial statements, to account for inflation in recent years. However, the limits related to the number of employees have not been changed.

In particular, paragraph 1 of Article 2435-bis of the Civil Code has been amended, establishing that companies that have not issued securities traded on regulated markets can prepare abbreviated financial statements if, in the first financial year or subsequently for two consecutive years, they do not exceed two of the following thresholds:

Total assets (balance sheet total): 5,500,000 euro (up from the previous limit of 4,400,000 euro);
Sales and services revenue: 11,000,000 euro (up from the previous limit of 8,800,000 euro);
Average number of employees during the year: 50.

Similarly, paragraph 1 of Article 2435-ter of the Civil Code has been amended, defining companies as micro-enterprises if, in the first year or subsequently for two consecutive years, they do not exceed two of the following limits:

Total assets (balance sheet total): 220,000 euro (up from the previous limit of 175,000 euro);
Sales and services revenue: 440,000 euro (up from the previous limit of 350,000 euro);
Average number of employees during the year: 5.

Additionally, it has been established that parent companies, together with their subsidiaries, are exempt from the obligation to prepare consolidated financial statements if, for two consecutive years, they do not exceed two of the following thresholds on a consolidated basis:

Total assets (balance sheet total): 25,000,000 euro (up from the previous limit of 20,000,000 euro);
Sales and services revenue: 50,000,000 euro (up from the previous limit of 40,000,000 euro);
Average number of employees during the year: 250.

The increase in size limits, which extends the number of entities eligible for simplified financial statement preparation, will apply to financial years starting on or after January 1, 2024.

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