Consolidated financial statements are prepared in accordance with Belgian GAAP as defined in the royal decree of 29 April 2019 (Dutch | French).

The royal decree of 18 January 2005 (Dutch | French) allows companies to publish their consolidated financial statements in accordance with IFRS, however this decision is irrevocable.

For all quoted companies, credit institutions, insurance companies and investment firms, the consolidation if IFRS as adopted by the European Union is an obligation.

The obligation to prepare and file consolidated financial statements is further governed by legal rules laid down in 3:21 to 3:36 of the Code of companies and associations (Dutch | French).

Every company that either exercises sole or joint control over one or more subsidiaries or that forms a consortium together with other entities (entities with common management according to article 1:19 of the Code of companies and associations is required to prepare consolidated financial statements.

In Belgium, the two exemptions to the consolidation obligation are:

1. Reduced-size groups

Based on article 1:26 of Code of companies and associations, if a group does not exceed more than one of the following criteria, it does not need to prepare consolidated financial statements:

• Annual average workforce: 250
• Total assets: 17 000 000 EUR
• Annual turnover (excluding VAT): 34 000 000 EUR

If the group does not have a formal process of consolidation and calculates the thresholds without eliminating the amounts intra-groups, these thresholds are increased by 20%.

The consolidation is mandatory for PIEs even if it is a reduced-size group.

2. Sub-consolidation exemption

A group does not need to publish consolidated financial statements, when its financial statements and those of all its subsidiaries are included in the consolidated financial statements of its parent or ultimate parent company, provided that:

• The parent's, or ultimate parent's, consolidated financial statements are prepared in accordance with directive 2013/34/EU guidelines or equivalent
• The general meeting of shareholders approves the exemption (valid for two accounting periods) with a qualified majority (90% for NV/SA and CVA/SCA legal forms, 80% for all other companies)
• The consolidated financial statements of the parent or ultimate parent are published at the Central Balance Sheet Office in one of the three national languages.

This exemption in itself does not impact the legal requirements to present consolidated financial statements (with a restricted number of notes) with the annual information to the works council.

The absence of consolidated financial statements based on the sub-consolidation exemption should be mentioned in the statutory annual accounts of the company, together with:

• Information about the consolidating parent company
• A special motivation about the compliance with the conditions for the exemption