What formats are there for accounts?
There are two formats that small companies can adapt when preparing each year. There is FRS 105 for micro-entities and FRS 102(1A) for small companies.
FRS 105 would be permitted for companies satisfying at least two of the following thresholds:
Turnover less than £632,000
Balance Sheet value less than £316,000
Less than 10 employees
The filings under FRS 105 will be simplified compared to the filings under FRS 102(1A) or any other standard for that matter. There is no requirement for a director’s report and no detailed notes are needed that give further information to the amounts shown in the balance sheet. A profit and loss are required although this is omitted from the ‘filleted’ accounts that are filed with Companies House.
FRS 102(1A) would be permitted for companies satisfying at least two of the following thresholds:
Turnover less than £10.2 million
Balance sheet vat less than £5.1 million
Less than 50 employees.
The filings under FRS 102(1A) will require more information to be made public about the company. The directors report is required and detailed notes supporting the accounts are also prepared. The notes will give breakdown on the amounts shown on the profit and loss statement and the balance sheet. Although it is permitted to file ‘filleted’ accounts with Companies House.
The decision will be if you can file under both formats which you want to choose, and it will more than likely come down to how much information you want to make public. Filing under FRS 105 will reduce the disclosures that are made public and if that is the primary concern FRS 105 would be the preferred filing format.
There may also be slight variations in the terminology used in the accounts. If you are using terminology from the Companies Act the terms used will be Profit and Loss Account and Balance Sheet, if you are using the FRS terminology these will be called Income Statement and Statement of Financial Position.