CSSF communiqué regarding the publication of the Grand-ducal Regulation of 25 October 2024 increasing the size criteria for undertakings and the Q&A CNC 24/034 on the practical application of increasing the size criteria as defined in Luxembourg accounting law

The CSSF would like to draw attention to the following publications:

• The Grand-ducal Regulation of 25 October 2024 increasing the size criteria¹ (“GDR of 25 October 2024”) published on 7 November 2024 in the Official Journal and available online at Grand-ducal Regulation raising the size criteria;
• Questions/Answers CNC 24/034 (“Q&A CNC 24/034”) entitled “Increase of the size criteria under Articles 35 and 47 LRCS, as well as under Article 1711-4 LSC: Practical application” available online on the website of the Commission des normes comptables, section “Publications”, sub-section “Doctrine” Doctrine (cnc.lu).

The GDR of 25 October 2024 implements Commission Delegated Directive 2023/2775 of 17 October 2023² increasing the size criteria in relation with the categorisation of undertakings and groups into national law. In order to take into account the high inflation of 2021 and 2022, and more generally, to reflect price increases over the period from 2013 (when Accounting Directive 2013/34/EU was adopted) to 2023 (year of the first increase of the thresholds since the adoption of the Accounting Directive 2013/34/EU³), the monetary thresholds relating to balance sheet total and net turnover, to be applied to the different categories of undertakings and groups, were thus increased by 25% compared to the thresholds set by Directive 2013/34/EU.

Companies may apply the adjusted size criteria already for financial years starting on or after 1 January 2023.

The increase in the size criteria will contribute to reduce the administrative burden on undertakings and groups. Thus, certain large undertakings will be recategorised as medium-sized undertakings, thereby exempting them from the sustainability disclosure requirements (Directive (EU) 2022/2464⁴).

Q&A CNC 24/034 presents practical guidance to stakeholders regarding the implementation of the adjusted size criteria to undertakings and groups in Luxembourg. Given the option for undertakings to apply the adjusted size criteria to financial years starting on or after 1 January 2023 (instead of 1 January 2024 or later), the effect of the new thresholds on the categorisation of (pre-existing) Luxembourg undertakings will apply as from the 2025 financial year.

In fact, given the first application of the adjusted size criteria to the 2023 financial year and considering the criteria of non-exceedance (or exceedance) for two consecutive years (the “repetition criterion”)⁵ – i.e. during the 2023 and 2024 financial years – the recategorisation of a company from a higher to a lower category (or from a lower to a higher category) will indeed take place, at the earliest (unless otherwise permitted), during the 2025 financial year, i.e. the financial year during which the double non-exceedance (or double exceedance) took place.