Accounting Standards in Ireland for Small Business

In Ireland, small businesses must follow Irish Generally Accepted Accounting Principles (GAAP), primarily through FRS 102 Section 1A for small entities or FRS 105 for micro-entities, as required by the Companies Act 2014 (as amended). These simplified standards make compliance easier and more cost-effective for SMEs, helping you focus on growth rather than complex reporting. 

It becomes essential to perform accounting procedures with the assistance of Irish accountants who have proper knowledge of the latest changes that appear over the years. However, the general principles under which this approach is performed remain the same. Our team of Irish accountants can assist foreign investors with their compliance requirements accounting.

Accounting Procedures for Irish Small Businesses

The Financial Reporting Council (FRC) oversees UK and Irish GAAP standards like FRS 102, with recent simplifications benefiting small and micro-companies under the Companies Act. Key updates from the 2024 periodic review take effect for periods beginning on or after 1 January 2026, including changes to leases, revenue recognition and supplier finance arrangements making Irish standards more aligned with international practices. 

Changes in the Accounting standards in Ireland have recently been applied to small companies (updated thresholds effective for financial years from 1 January 2024). These updates stem from EU directives and aim to reduce burdens for small and micro-companies. Our Irish accountants can provide details as the FRC imposed the new regulation as an effect of a European Directive and hence referring it to an Accounting Directive for such entities.

FRS 105: Simplified Option for Micro-Companies

The Financial Reporting Standard applicable to the Micro-entities Regime – remains available for the smallest Irish businesses (effective since 1 January 2016). It offers the simplest reporting: just a balance sheet and basic notes, no profit & loss account or cash flow statement required publicly.

The accounting standard is available for small and micro-enterprises under the provisions of the Companies Act. Current micro-company thresholds (meet 2 of 3): turnover ≤ €900,000; balance sheet total ≤ €450,000; ≤10 employees (increased from €700k/€350k in 2024).

The turnover of the company can be a maximum of €900,000, even if the sum of the employees is 10 or fewer this ensures eligibility as long as two thresholds are met.

FRS 105 simplifies presentation of assets and liabilities, with minimal disclosures ideal for startups and sole traders. The FRS 105 has been applicable since the 1st of January 2016 and represents a simplified way to conduct accounting activities, which refers to the presentation of the company’s assets and liabilities.

FRS 102 Section 1A: Perfect for Most Small Irish Businesses

For small companies (not qualifying as micro), use Section 1A of FRS 102 – a tailored version of the main FRS 102 standard with reduced disclosures. Current small company thresholds (meet 2 of 3): turnover ≤ €15 million; balance sheet total ≤ €7.5 million; ≤50 employees (updated 2024 from €12m/€6m). 

This qualifies many SMEs for audit exemptions, abridged CRO filings and simpler notes no cash flow statement needed. Business forms can be registered in Ireland.

Common Business Structures and Their Accounting Needs

• Private company limited
  The Irish private limited liability company is formed by members whose liability is limited to the amount stated by the memorandum of association and to the extent of their initial contribution. It is the most common business form registered and one founder is mandatory to incorporate this type of entity most use FRS 102 Section 1A or FRS 105.
• Public company limited
  A public company limited by shares (listed or unlisted) and its shares registered at the Stock Exchange (if applicable) and have no restriction on the number of shareholders. At the disposal of the company, at least 25% out of EUR 38,000 must be paid up at registration typically requires full FRS 102 or IFRS.
• Companies limited by guarantee
  Companies limited by guarantee don’t have share capital and are usually set up to provide corporate protection to entities such as sports clubs, charities or trade associations. Every year, these companies are required to submit audited accounts at the Companies Registration Office and must have at least seven members (may qualify for small company regime).
• Limited liability partnership
  In Ireland, a limited liability partnership consists of at least one general partner and one silent partner. Here, the partner shouldn’t exceed more than 20 people and however, if the business operation is related to the banking sector the members shouldn’t be more than 10. The partnership can be incorporated by corporate bodies or by people; however, the general partners are liable for all the debts and obligations of the entity.
• General partnership
  It is formed by members with full liability and the same decisional powers in the enterprise. In this, the partners will enter the liquidation procedure and their personal assets are not protected still needs basic accounting records under Irish GAAP.

For small businesses in these structures, understanding these accounting requirements is essential for legal compliance, financial transparency and operational success.

Ireland offers a favorable business environment, attracting both local and foreign investors due to its competitive corporate tax rate, strong regulatory framework and access to the EU market. To maximise business potential and ensure compliance with Irish Generally Accepted Accounting Principles (GAAP), it is crucial to adopt the right accounting practices from the outset especially with 2026 FRS 102 updates approaching.

Key Tip for Irish SMEs: Check your company size annually against updated thresholds to claim audit exemptions and simplified reporting. One late CRO filing no longer triggers mandatory audits (updated 2024/2025 rules). Partnering with experienced accountants and legal experts provides businesses with comprehensive support in areas such as company formation, accounting for small businesses, tax compliance, financial reporting and regulatory adherence.​

Proper accounting procedures help maintain accurate financial records, avoid legal complications and facilitate smoother audits. Companies that adhere to the latest Financial Reporting Standards (FRS 102 Section 1A and FRS 105) can optimise their reporting structure, making financial management more efficient.

Contact us today via call +353 212069255 or mail at info@outbooks.com.

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