Enterprises Will Prepare Sustainability Reports

The Ministry of Finance of Ukraine has published a draft law "On Amendments to the Law of Ukraine ‘On Accounting and Financial Reporting in Ukraine’ Regarding the Introduction of Sustainability Reporting."

The draft law aims to align national accounting and financial reporting legislation with European regulatory requirements.

Key Provisions of the Draft Law

The document proposes amendments to the Law of Ukraine ‘On Accounting and Financial Reporting in Ukraine’, including:

• The introduction of sustainability reporting preparation, submission, and publication in Ukraine.
• Updating the criteria for classifying enterprises and groups.
• Establishing accounting requirements for state-owned enterprises and companies in which the state owns more than 50% of shares, in accordance with international financial reporting standards (IFRS), as well as mandatory preparation and submission of a management report.

What Is Sustainability Reporting?

Sustainability reporting is a document in which a company provides information on its impact on sustainability-related issues and how these aspects affect its operations, performance, and market position.

Who Will Be Required to Submit Sustainability Reports?

• Large enterprises
• Medium-sized enterprises whose securities are listed on a regulated capital market
• Small enterprises whose securities are admitted to trading on a regulated capital market
• Parent companies of large groups

Updated Classification of Enterprises

The draft law also proposes new definitions for enterprise categories:

Micro-enterprises

Companies that, at the time of preparing annual financial statements for the previous year, meet at least two of the following criteria:

• Balance sheet assets: up to €450,000
• Net turnover: up to €900,000
• Average number of employees: up to 10 people

Small Enterprises

Companies that do not qualify as micro-enterprises but meet at least two of the following criteria:

• Balance sheet assets: up to €5 million
• Net turnover: up to €10 million
• Average number of employees: up to 50 people

Medium Enterprises

Companies that do not qualify as small enterprises but meet at least two of the following criteria:

• Balance sheet assets: up to €25 million
• Net turnover: up to €50 million
• Average number of employees: up to 250 people

Large Enterprises

Companies that exceed the criteria for medium-sized businesses, namely:

• Balance sheet assets: more than €25 million
• Net turnover: more than €50 million
• Average number of employees: more than 250 people