The amendment also introduces the obligation to prepare a sustainability report not only for large but also for small and medium-sized enterprises (except micro-enterprises) whose transferable securities are admitted to trading on a regulated market in a Member State of the European Union (public interest entities), as well as for branches of enterprises.
Subsidiaries and branches of undertakings regulated by the legislation of a third country will also prepare sustainability reports.
The obligation comes into force for the 2024 accounting year for large public-interest entities that exceed the criterion of an average number of employees in the financial year of 500 as of 31 December of the accounting period, and public-interest entities that are parent companies of a large group that exceeds the criterion of an average number of employees in the financial year of 500 as of 31 December on a consolidated basis.
The obligation to prepare and publish the report for the remaining undertakings within the scope of the European Directive arises gradually in the following reporting years – until 2028.
The amendments to the Accounting Act will substantially reduce the administrative burden for around Z700 enterprises that will change their category from small to micro-enterprises and 350 medium-sized enterprises that become small, as a large number of them will benefit from a simplified form of financial reporting.
Small enterprises that exceed the indicators of balance sheet value of assets – BGN 4 million and net sales revenue – BGN 8 million as of 31 December of the current reporting period are subject to mandatory financial audit. This is stipulated by amendments to the Accounting Act, adopted by the Parliament at the second reading.