The Financial Reporting Council (FRC) has published an amended version of the Financial Reporting Standard for Smaller Entities (FRSSE) for use by micro-entities which want to take advantage of new regulations allowing them to prepare simplified financial statements.
Micro-entities are the UK’s smallest companies. They are now able to use the FRSSE when choosing to apply the new micro-entities regime and prepare simplified financial statements with fewer disclosure notes than previously required by the FRSSE. The micro-entities regime was introduced into UK company law in November 2013 following new EU legislation.
Roger Marshall, FRC Board Member and Chair of the Accounting Council, said:
“The FRC has amended the FRSSE to bring it into line with the new regulations. In consequence, micro-entities that currently prepare their financial statements in accordance with the FRSSE will continue to be able to use the same standard whilst also benefitting from the Government’s simplification of the law. The micro-entities regime will be available to over one and a half million small businesses.”
The amendments to the FRSSE are effective from the same date as the new legislation, financial years ending on or after 30 September 2013 for companies filing their accounts on or after 1 December 2013.
There are other considerations when deciding whether to continue to file abbreviated accounts or changing format to micro-entity accounts, particularly that the amount of information included in micro-entity accounts is significantly less, and some feel that the simplified accounts may not give a true and fair view. Also, most of the costs involved in accountancy are incurred in the preparation of the numbers and there will be little savings to be made by changing the format of the statutory accounts for our micro-entity clients. The numbers still have to be calculated and correct even if they’re not shown on the reports that are submitted to Companies House. We will discuss this on a case by case basis with clients.
You can see further information in relation to the definition of a micro-entity and related amendments to accounting policy and financial statement presentation by downloading our guide FRSSE update for micro-entity reporting.
For further information please contact Lesley Malkin