1. The inclusion of an entity in a size category determines in particular its accounting obligations in respect of:

1. the financial statements it prepares, in accordance with Article 16;
2. simplifications and exemptions from certain measurement rules and from providing certain information in the appendix, in accordance with Article 30;
3. a prohibition on the use of certain measurement rules.

2. For the accounting purposes of this law, i.e. for determining the accounting obligations of entities obliged to apply the accounting provisions of this law, this article classifies the underlying entities based on their size into: micro, small, medium and large. However, the following categories of entities do not apply the accounting rules prescribed in Chapters 4 to 8, but apply a different accounting framework as defined in Article 1 of this Law:

1. entities that apply IFRS on a mandatory or voluntary basis,
2. the Bank of Greece (applying the Eurosystem accounting principles);
3. profit or non-profit entities belonging to the public sector or controlled or supervised by the public sector, and fall under the application of Article 156 of Law 4270/2014 (they apply the accounting framework provided for them); and
4. the undertakings for collective investment in transferable securities (UCITS) of Law 4099/2012 (Directive 2009/65/EC), whether they operate in the form of a mutual fund or a variable capital investment company (VCCI). Therefore, for the preceding categories of entities, the size-based classification for accounting purposes does not apply.

3. Inclusion or change of size category occurs when the entity exceeds or ceases to exceed for two consecutive years the size thresholds summarised in the table below.Note that the average number of staff refers to full-time daily and annual employees (equivalent units). [2]

Small entities under Article 1(2c) (OE, EE, sole proprietorship, etc.) remain small if they do not exceed two of the criteria of 50 employees, total assets of 4.000.000.000 and turnover of 8.000.000.000. [3]

4. The purpose of the criteria of Article 2, in accordance with the relevant provisions of Directive 2013/34/EU, is to classify entities into size categories, depending on their economic importance. The average number of staff is calculated on a full-time basis on a daily and annual basis for all employees who have or are presumed to have paid employment. In particular, it includes those who have a paid employment relationship but also persons employed in a relationship that can be assimilated to paid employment, such as lawyers, accountants or engineers when they are full-time and irrespective of the way they are paid (e.g. by invoice). Also included are those employed on a leased basis by another entity and owner-operators if they are employed and paid by the entity. It should be clarified that apprentices and students employed under education and training contracts and employees on parental leave are not taken into account.

5. With regard to the calculation of the average number of staff, percentages less than 0,5 are rounded downwards and percentages greater than 0,5 are rounded upwards.
For example, an entity employs 5 full-time employees, 2 seasonal 5-month but full-time daily employees and 7 full-time annual but part-time 3-hour daily employees, as well as a full-time professional who is paid on an invoice basis. The average number of personnel employed in the period is (5*12/12)+(2*5/12)+(7*12/12*3/8)+1=9.46, rounding up to 9 (in annual employment equivalents).

6. It is noted that the only criterion for the inclusion of the entities of paragraph 2(c) of article 1 (limited partnership, general partnership, sole proprietorship, etc.) in the category of micro entities is their turnover, with a limit of EUR 1,500,000.00 for two consecutive annual periods. That is, a micro entity under paragraph 2(c) of Article 1 is included in the category of small entities (from very small) when it exceeds the threshold of (net) turnover of EUR 1,500,000.00. As a small entity, it will be obliged to prepare the statements of paragraph 5 of Article 16, i.e. it will also prepare a balance sheet, and for this reason it must use a double-entry accounting system, in accordance with paragraph 10 of Article 3. It is clarified that this entity will continue to be considered as a small entity based solely on the criterion of paragraph 3 (exceeding a net turnover of EUR 1,500,000.00), even if the other two criteria are below the thresholds for micro entities in paragraph 2 of Article 2 (total assets ≤350,000 and average number of employees ≤10[4]). This follows clearly from paragraph 4 of Article 2. Likewise, if this entity, having joined the category of small entities (from very small), ceases to exceed the threshold of net turnover of EUR 1,500,000.00 for two consecutive periods, it will be downgraded to a size category (becoming very small again), even if the other two criteria exceed the thresholds of paragraph 2 of Article 2 of Law 4308/2014 (total assets >350,000 and "average number of employees >10"[4]).

7. In particular, it is clarified that any entity referred to in paragraph 2(c) of Article 1 that was a very small entity in the last annual period prior to the implementation of the law, in order to be placed in a higher category, must exceed the thresholds set out in the new law for two consecutive annual periods. That is, if an entity exceeded the net turnover threshold of EUR 1,500,000 in 2014 for the first time, it must also exceed this threshold in 2015 in order to be considered a small entity (from very small) in 2016.

8. It is noted that under para. 10 of Article 2 of this Law, profit or non-profit entities belonging to the public sector or controlled by the public sector or under the supervision of the public sector, when they do not fall under the application of Article 156 of Law 4270/2014 for accounting purposes, are included in 'large' entities provided that they do not fall within the categories of entities referred to in paragraph 2(a), 2(b) or 2(c) of Article 1 (public limited company, limited liability company, limited liability partnership, limited liability partnership, private limited company, limited partnership, general partnership, sole proprietorship, etc.). When they fall under paragraph 2(a), 2(b) or 2(c) of Article 1, they follow the criteria of these entities.

9. Finally, according to paragraph 11 of Article 30, liquid fuel marketing undertakings under Law 3054/2002 that fall under case (c) of paragraph 2 of Article 1 (i.e. when they have the legal form of a limited partnership, a general partnership, a sole proprietorship, etc. ) are considered micro entities, provided only that their turnover does not exceed the turnover threshold of paragraph 4 of Article 2, i.e. the threshold for small entities (EUR 8,000,000). A change of category requires exceeding the above threshold for two consecutive periods.

10. It is clarified that this entity (of paragraph 11 of Article 30) will continue to be considered as a micro entity based solely on the turnover criterion, i.e. if it does not exceed the turnover threshold of EUR 8,000,000 for two consecutive annual periods, even if the other two criteria are higher than the thresholds for micro entities of paragraph 2 of Article 2 (total assets 350,000, and net turnover 700,000). If this entity exceeds the turnover threshold of EUR 8,000,000, it is now considered a small entity and prepares a balance sheet, unless it also exceeds the thresholds of medium-sized entities of paragraph 5 of Article 2 or the thresholds of large entities of paragraph 5 of Article 2 of Law 4308/2014.

11. For the purpose of applying the provisions of this law, 'turnover' is considered to be that derived from the normal activities of the entity, as defined in Annex A. Therefore, turnover does not include grants, unusual income (e.g. income from exchange differences, sales of assets or investments), or taxes, fees and royalties collected for the benefit of third parties. It is understood that the value of self-produced goods and revenues earned on behalf of a third party are excluded from the concept of revenue.

12. If the period (financial year or tax year) is less than 12 months (e.g. start during the period), the turnover for classification in the above categories of entities is annualised. It is clarified that a period of fifteen (15) days or more is counted as a month, while a period of less than 15 days is not taken into account, "but as a matter of practice, the total turnover is counted for annualization" [5]. In the case where the entity operated in the first annual period for a period of less than four months, no annualisation is applied for that period. Therefore, in this case the classification is based on the next two full annual periods.

13. It should be noted that the size criteria of Article 2 apply from 1 January 2015. The size of the enterprise (turnover, assets and average number of employees) of the last two annual periods prior to the application of this Law is the basis for determining the classification of the enterprise on the basis of the size of this Law. Therefore, for the 2015 period, the size of the entity will be judged based on the new quantitative criteria and the amounts in the financial statements for 2013 and 2014 as published for those years.

14. It is recalled that according to paragraph 6 of article 42a of the Law 2190/1920, the joint stock company and the limited liability company had the possibility, until 2014, to publish a condensed balance sheet, if they did not exceed the limits of two of the following three criteria: average number of employees during the period 50 persons, assets of 2.500.000,00 euros, and turnover of 5.000.000,000,00 euros. Apart from this, there is no correspondence in the classification of enterprises by size, before and after 31 December 2014.

15. As an example of classifying an entity by size, a public limited company for the years 2012 to 2014 had the following sizes:

Based on the above data, the company will be classified as "small" in 2015 for the accounting purposes of this law, since it does not exceed (for two consecutive periods) two of the (increased) criteria of this law: staff of 50 persons, assets of EUR 4,000,000.00, and turnover of EUR 8,000,000.00 in 2015 (exceeding only one and for only one period).

16. In the event of a change in the legal form or ownership of an entity that was included in the cases of paragraph 2a or 2b of Article 1, resulting in its inclusion in case 2c of the same Article, all available data shall be taken into account for the inclusion in a size class. For example, for a 'very small' limited liability company that at the end of the year 20X3 converted into a general partnership, the following data are given (note: the example refers to years after the application of Law 4308/2014).

On this basis, the limited liability company is considered 'very small' for the years 20X1 to 20X3. The new company (general partnership) in the year 20X4 is considered 'small' because it has not fallen below the turnover threshold of EUR 1,500,000.00 for two consecutive years, and will continue to use a double-entry accounting system, in accordance with Article 3 of this Law. However, in the fiscal year 20X5 it will be considered very small, and will be entitled to keep a simple accounting system. Slightly differentiating the example, if the turnover for 20X2 was below the threshold of EUR 1,500,000.00, the new entity in year 20X4 would be very small and would therefore be entitled to keep a simple accounting system.