The new Accountancy Act implements the requirements of EU Directive 2013/34 and, amongst other significant changes, it introduces new mandatory reports that have to be prepared by certain entities.
Report on payments to governments
It is required from large enterprises and all public interest entities active in the extractive industry or the logging of primary forests and is to be published together with the annual financial statements. If the entity is required to draw up consolidated financial statements, a consolidated report on payments to governments is then prepared.
The report is to include the total amount of payments to each government by types.
An annual report on payments to governments is not prepared in the case of a one-time payment or a series of related payments amounting to not more than BGN 195,600 were made during one reporting period.
Corporate governance declaration
Issuers of listed securities, credit institutions, insurance undertakings and reinsurance undertakings include in their annual report on the activities a corporate governance declaration in accordance with the Public Offering of Securities Act.
The corporate governance declaration may be prepared as a separate report published together with the activity report; or a document which is publicly accessible on the website of the entity.
Large enterprises which are public interest entities and which, as at 31 December of the reporting period, exceed the criteria for average number of employees during the financial year – 500 employees, include a non-financial declaration in their annual report on the activities.
The non-financial declaration contains descriptions of the policies of the entities in relation to their activities in the field of ecology, social issues and those related to the employees, human rights, anti-corruption activities, gender diversity and equality in management functions of enterprises – number of female and male employees, age, geographical diversity, education, professional qualities, religion.
The required content of the non-financial declaration may be prepared as a part of the annual report of the activities or as a separate report which has to be published together with the annual report of the activities and the annual financial statements.
These new reports must be filed together with the annual financial statements with the Commercial Register within the set deadline of 30 June of the following year.
The Accountancy Act is effective from 1 January 2016 and it should be noted that the penalties for non-compliance are much higher than previously. For example, in the case of non-publication of annual financial statements and other reports, the sanction may be between 0.1 – 0.5 percent of the turnover.
The topic was discussed at the 2016 KPMG Business Seminar for clients.
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