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Tánaiste and Minister for Enterprise and Innovation announces the Commencement of the Companies (Amendment) Act 2017

The Act comes into force on 18 July

An Tánaiste and Minister for Jobs, Enterprise and Innovation, Frances Fitzgerald, has today announced the commencement of the Companies (Amendment) Act 2017.

This Act maintains an important cost saving facility, first introduced in 2009 and used by companies that are based in Ireland while listed in the US. This is a measure that exempts certain companies from having to prepare two separate sets of financial statements, based on the same financial information but according to two different accounting standards.

Following the commencement of the new Act, this facility, which was due to end in December 2020, will stay in place for an additional 10 years. As a result, under the new Act, companies will be able to qualify for this facility up to 31 December 2030.

Welcoming the commencement of the Companies (Amendment) Act 2017, the Tánaiste said I am pleased to have brought this important and practical Act into operation. This new Act, which comes into force on 18 July next, will prolong a significant cost saving measure for some of our larger companies, who have been preparing their financial statements up to now using the American accounting standard. Before this Act, those companies were facing the prospect of having to produce a second set of financial statements, each year, according to a separate and different standard. This would be a significant and costly undertaking, requiring the introduction of new accounting systems within the next year or so.

In the circumstances, I believe that would have been an unwarranted and disproportionate requirement.

The efficiency with which this Act was brought from a proposal, through enactment and now to commencement shows that the Government is responsive to the needs of business. As a result, we have been able to give legal certainty to the businesses affected in good time, so that they can plan appropriately and avoid unnecessary expense.”

 

ENDS

For further information contact Press Office, D/Jobs, Enterprise and Innovation ph. 6312200 or press.office@djei.ie

Notes for Editors

The Tánaiste signed the Commencement Order for the Companies (Amendment) Act 2017 (No. 13 of 2017) on 11 July 2017. That Order (SI No 305 of 2017) sets Tuesday 18 July 2017 as the date that the Act comes into operation.

Content of the Act:

Companies that are registered in Ireland must prepare and file financial statements according to one of two accounting standards, depending, in particular, on whether they are listed on a regulated market in the EU or not. The two standards are the International Financial Reporting Standards (IFRS) and the Irish Generally Accepted Accounting Practices (Irish GAAP).

There are some companies that are registered in Ireland but listed on a stock exchange in the USA, such as the New York Stock Exchange. These companies are regulated in the USA by the Securities and Exchange Commission (the SEC) and are required by the SEC to prepare and file their financial statements according to US GAAP. These companies are not listed on a regulated market in the EU.

Section 279 of the Companies Act 2014 allows such companies to prepare and file their financial statements in Ireland using US GAAP, provided they meet certain criteria and comply with the Companies Act. Without the facility, these companies would be required to prepare and file financial statements using two different accounting standards, namely US GAAP and either IFRS or Irish GAAP, in respect of the same financial years.

This facility was introduced in 2009, extended in 2012 and re-enacted as section 279 of the Companies Act 2014.

Section 279 is a temporary measure and was due to end on 31 December 2020. The Companies (Amendment) Act 2017 extends that deadline by a further 10 years, to end on 31 December 2030. The Act also adds the criterion that, in order to avail of section 279 in future, a company must have been incorporated in Ireland before 18 July 2017 (i.e. the commencement date of the Act).

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