We live in interesting times for financial reporting standards...OK, maybe that's a bit of a stretch, but 2016 certainly is all change in the FRS world.
From 1st January 2016 the Financial Reporting Standard for Smaller Entities (FRSSE) has been replaced by a number of new UK GAAP alternatives, with FRS 102 likely to be the most appropriate alternative for many small businesses.
However, very small businesses (known as “micro-entities”) can choose to adopt FRS 105, which is a simpler version of FRS 102 specifically designed for the Micro-entities Regime that was introduced in 2013.
To qualify for FRS 105, a small business must be classified as a micro-entity by satisfying two of the following three eligibility criteria:
The small business must also not be a charity, partnership or credit institution, and must not be undertaking investment, financial holding or insurance business.
By adopting FRS 105 very small businesses are able to file and prepare abridged accounts and simplify the company’s financial reporting obligations in the following ways:
Yes: by simplifying the reporting obligations for small businesses, FRS 105 also removes a certain degree of flexibility when compiling and filing a company’s statutory accounts. For example:
If you’re feeling turned around by the changes to financial reporting standards, and would like an expert to help keep on you on the right track, Accounts and Legal is here to help.
Our team of small business accountants are experts when it comes to financial reporting, and we offer a full range of fixed-price tax, accounting and business planning services tailored to the needs of small businesses.
Get in touch with Accounts and Legal to discuss your requirements, or get an online quote now using our instant accounting quote tool.