1. Member States may provide for exemptions from certain obligations under this Directive in accordance with paragraphs 2 and 3 in respect of companies which on their balance sheet dates do not exceed the limits of two of the three following criteria (micro-entities):
(a) balance sheet total: EUR 350 000;
(b) net turnover: EUR 700 000;
(c) average number of employees during the financial year: 10.
2. Member States may exempt companies referred to in paragraph 1 from any or all of the following obligations:
(a) the obligation to present 'Prepayments and accrued income' and 'Accruals and deferred income' in accordance with Articles 18 and 21;
(b) where a Member State makes use of the option in point (a) of this paragraph, it may permit those companies, only in respect of other charges as referred to in point (b)(vi) of paragraph 3, to depart from Article 31(1)(d) with regard to the recognition of ' Prepayments and accrued income' and 'Accruals and deferred income', provided that thi