An undertaking above EUR 450 million net turnover and 1,000 average employees must report on its key intangible resources, explain how its business model depends on them, and explain how they create value.
The requirement, in our words
An undertaking that on its balance sheet date exceeds EUR 450 million net turnover and an average of 1 000 employees in the year must report in its management report on its key intangible resources, explaining how its business model fundamentally depends on them and how they create value. The duty now follows the new size test instead of the large-undertaking and listed-SME classes.
Why it matters
This is not a sustainability disclosure. It is a management report disclosure that sits beside the sustainability statement and uses the same threshold. It matters because a company can be out of the sustainability statement and still be caught by this narrative, or in both and duplicate the work. The text asks for the resources, the dependence and the value creation, which is a three-part explanation rather than a list.
What changed
The old fourth subparagraph applied to large undertakings. The replacement ties the duty to the same two figures used for the sustainability statement, so the population is narrower and aligned.
What to do
- Test the two figures at the balance sheet date and record the source of each.
- List the key intangible resources and explain the dependence of the business model on each.
- Explain how each resource creates value, with the evidence the board used.
Evidence to have ready
| Category | Artefact |
|---|---|
| Management report content | Management report section identifying each key intangible resource and the value-creation explanation |
| Management report content | Threshold working paper showing net turnover and average headcount at the balance sheet date |
| Management report content | Internal schedule of intangibles to revenue streams used to draft the section |
Common failures
- Section drafted from the old size classes and never retested against the new thresholds
- Generic list of brands and patents without saying how the business model depends on them
Dates
Applies to financial years starting on or after 1 January 2027, through the amended Article 19(1). Transposition by 19 March 2027.
The question to test
Does the management report explain value creation from each key intangible resource, or only name the resources?
Cross-references
A2-3 Individual statement threshold · A2-8 Consolidated statement threshold
Source
Article 2(3), replacing the fourth subparagraph of Article 19(1) of Directive 2013/34/EU; OJ L 2026/470, 26 February 2026; https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32026L0470. Our statement of the duty, read from the Official Journal text and the held control record, not the instrument verbatim.
Not legal advice; does not certify. A reading of the duty and the evidence commonly sampled, not a substitute for the Official Journal text, the national transposing measure or your auditor's judgement.