BITS FOR THE ANORAKS
– New Accounting Standards
Small and micro entity reporting
The Financial Reporting Council (FRC) has issued amendments to UK accounting standards, ushering in a new financial reporting framework for small and micro entities. The changes will come into effect for accounting periods beginning on or after 1 January 2016. Early adoption is generally permitted.
Under the new framework, most small entities that currently apply the Financial Reporting Standard for Smaller Entities (FRSSE) will switch to FRS 102 The Financial Reporting Standard for the UK and Republic of Ireland. The FRSSE will be withdrawn. All entities (excluding IFRS reporters and those that opt-in to the micros regime) will now apply a single up-to-date, internationally-aligned standard.
A separate standard, FRS 105 The Financial Reporting Standard applicable to the Micro-entities Regime, is available for use by a micro entity choosing to apply the micro-entities regime.
The new standard is based on the recognition and measurement requirements of FRS 102, amended to comply with the legal framework for micro-entities. For example, amendments have been made to accommodate the fact that the micro-entities’ regime does not permit the revaluation or subsequent measurement of assets or liabilities at fair value. FRS 105 also reflects the fact that very limited disclosures are required in micro-entity accounts.
What does this mean for you?
The way we will have to prepare the accounts for your Company is going to be different.
The accounts you get from us may well look different to those you have had before. The amount of work we need to undertake to get the figures is not going to decrease or increase, it’ll just be different.
As you can imagine we are strictly controlled by the Institute of Chartered Accountants in England and Wales. They govern all the work we undertake on your behalf. When we prepare accounts at the moment we have to refer to certain legislation and make sure the accounts conform to the required standards. Its these standards that are effectively changing.
If you have any queries about the “different” accounts please contact to us.