Application of the SME definition in specific cases

The definition of SMEs in Article 5, point (9) CRR requires assessing the annual-turnover threshold for the company, enterprise or undertaking “according to its most recent consolidated accounts”. In applying this provision, reference should be made to the accounting framework applicable to the company, enterprise or undertaking in question. In particular, for undertakings within the scope of Article 1 of Directive 2013/34/EU, the SME definition should be interpreted in accordance with the accounting framework based on this Directive. Where a company, enterprise or undertaking is not within the scope of Article 1 of the same Directive, compliance with the SME definition may be verified based on the most recent information provided under other periodic and statutory frameworks for the publication or the reporting of financial information of undertakings to public authorities of their country of domicile, provided the information therein gives an accurate indication of annual turnover. 1.    For a company, enterprise or undertaking that is included in consolidated financial statements prepared by the ultimate parent of a group for the purpose of the applicable accounting framework, the relevant consolidated accounts are those of the group headed by the ultimate parent. Therefore, the turnover figure to be considered is the one reported in the consolidated financial statements of the ultimate parent. This applies regardless of whether the company, enterprise or undertaking itself prepares consolidated financial statements as a parent undertaking of a sub-group, or is a subsidiary undertaking included in consolidated financial statements of a sub-group prepared by a parent that is not the ultimate parent undertaking of the group. 2.    In the case of a company, enterprise or undertaking that is not part of a group and therefore only prepares its own financial statements, for the purpose of the applicable accounting framework, the applicable consolidated accounts are those prepared on an individual basis from its own financial statements. Alternatively, the assessment may rely on other information provided under periodic and statutory frameworks for the publication or the reporting of financial information to public authorities, as long as the information provides a reliable indication of the annual turnover.