The Cyprus Companies Law Cap 113 has been amended to transpose the EU Accounting Directive (2013/34/EU) into domestic law with effect from September 23 2016.
One of the most important changes is the abolition of the exemption from audit that was previously available to small or dormant companies.
Other changes relate to the exemptions from certain accounting and disclosure requirements. These exemptions are available to companies or groups which are classified as small or medium-sized, according to criteria of gross assets at the last balance sheet date, turnover excluding VAT for the financial year and average number of employees during the financial year. In order for a company to fall within a specific category and qualify for the exemptions, at least two of the three measures must be below the prescribed threshold.
The directors' report required to be published under the Companies Law is now called the 'management report'. Most of the provisions relating to the content of the report remain unchanged, but there have been some additions and amendments.
The management report must include an objective review of the development and performance of the company's business and of its position, together with a description of the principal risks and uncertainties that it faces. This review must be a balanced and comprehensive analysis of the development and performance of the company's business and of its position, consistent with the size and complexity of the business.
The amending law also introduces a prohibition on payment of dividends if any development and formation costs are included as assets in the balance sheet and have not been completely written off, unless the amount of the reserves available for distribution and profits brought forward is at least equal to that of the costs not written off.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.