UK GAAP: reporting options for micro, small and medium/large companies
The Financial Reporting Council (FRC) has issued a suite of changes that are largely in response to the implementation of the new EU Accounting Directive, and include:
- a new standard, FRS 105 The Financial Reporting Standard applicable to the Micro-entities Regime
- new Section 1A Small Entities of FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland
- other changes necessary for continued compliance with company law
- the annual review of FRS 101 Reduced Disclosure Framework.
The main changes are effective for accounting periods beginning on or after 1 January 2016, with early application permitted for accounting periods beginning on or after 1 January 2015.
The FRC has also made available an Overview of the financial reporting framework, which describes the financial reporting framework applicable for accounting periods beginning on or after 1 January 2016. It includes key differences between the FRSSE and the new requirements set out in FRS 105 and Section 1A of FRS 102.
The reporting options available are:
Micro
The definition of a micro-entity is contained in sections 384A and 384B of the Companies Act 2006. The qualifying conditions are met by a company in a year in which it does not exceed two or more of the following criteria: (a) Turnover – £632,000 (b) Balance sheet total – £316,000 (c) Number of employees – 10.
Reporting options:
- FRS 105
- FRSSE 2015 (one year only)
- Section 1A of FRS 102
- FRS 102
- EU-adopted IFRS
Small
The definition of a small entity is contained in sections 382 and 383 of the Companies Act 2006. The qualifying conditions are met by a company in a year in which it does not exceed two or more of the following criteria: The thresholds are: (a) Turnover – £10.2m (b) Balance sheet total – £5.1m (c) Number of employees – 50.
Reporting options:
- FRSSE 2015 (one year only)
- FRS 102
- EU-adopted IFRS
- Section 1A of FRS 102
Medium/large
Reporting options:
- FRS 102
- EU-adopted IFRS
For more information, visit ACCA’s technical advisory webpages.
Article contributed from ACCA InPractice