Businesses will have to report on sustainable development: who is affected
The Ministry of Finance of Ukraine has published a draft law "On Amendments to the Law of Ukraine "On Accounting and Financial Reporting in Ukraine" regarding the introduction of sustainable development reporting".
The draft law was developed to harmonize national legislation in the field of accounting and financial reporting with the requirements of European legislation.
In particular, the draft law proposes to amend the Law of Ukraine "On Accounting and Financial Reporting in Ukraine" to
- to introduce in Ukraine the preparation, submission and disclosure of sustainable development reports;
- update the criteria for determining the category of enterprises and groups;
- to regulate accounting by state-owned unitary enterprises and business entities with more than 50 percent of their authorized capital owned by the state in accordance with international financial reporting standards, as well as the preparation and submission of a management report.
Sustainability reporting is the reporting of an enterprise that contains information necessary to understand its impact on sustainable development issues and how these issues affect the development, efficiency and position of the enterprise.
Sustainability reporting is required for:
- large enterprises;
- medium-sized enterprises whose securities are admitted to trading on a regulated capital market;
- small enterprises whose securities are admitted to trading on a regulated capital market;
- parent companies of a large group.
At the same time, the draft law changes the definition of the categories of enterprises:
Microenterprises will be defined as enterprises whose indicators as of the date of preparation of annual financial statements for the year preceding the reporting year meet at least two of the following criteria
- book value of assets - up to and including EUR 450 thousand;
- net turnover - up to and including EUR 900 thousand;
- average number of employees - up to 10 people inclusive.
Small enterprises are those that do not meet the criteria for microenterprises and whose indicators as of the date of preparation of the annual financial statements for the year preceding the reporting year meet at least two of the following criteria
- book value of assets - up to and including EUR 5 million
- net turnover - up to and including EUR 10 million;
- average number of employees - up to 50 people inclusive.
Medium-sized enterprises are those that do not meet the criteria for small enterprises and whose indicators as of the date of preparation of the annual financial statements for the year preceding the reporting yearmeet at least two of the following criteria
- book value of assets - up to and including EUR 25 million
- net turnover - up to and including EUR 50 million;
- average number of employees - up to 250 people inclusive.
Large enterprises are those that do not meet the criteria for medium-sized enterprises and whose indicators as of the date of preparation of the annual financial statements for the year preceding the reporting year meet at least two of the following criteria
- book value of assets exceeding EUR 25 million;
- net turnover exceeds EUR 50 million;
- the average number of employees is more than 250.
Comments and suggestions to the draft law should be submitted within 10 business days from the date of its publication on the official website of the Ministry of Finance of Ukraine in writing and/or electronically to the following address:
Ministry of Finance of Ukraine, 11 Mezhyhirska St., Kyiv, 04071, e-mail: y.shevchuk@minfin.gov.ua.
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