Reporting under FRS 105
Following the withdrawal of abbreviated accounts and the FRSSE (Financial Reporting Standard for Smaller Entities) at the end of 2016, many business owners have come across changes in their financial reporting format with the adoption of FRS 105 accounting standard.
First of all, it is because your company has satisfied the size threshold for being classified as a micro-entity.
This means it met with two of the following three conditions:
The regime excludes some types of companies. Among those are public and charitable companies, investment undertakings, financial institutions and insurance businesses.
Under FRS 105, the requirement for micro-entities to prepare a directors’ report is removed. They are required to prepare a simplified layout of the profit and loss account and balance sheet. The notes to the financial statements are included at the foot of the balance sheet which would be information about directors’ benefits and guarantees and other financial commitments.
FRS 105 is not mandatory. In some cases as stated below, it might not be the right reporting regime for some companies. In those cases, they might choose to report under FRS 102 reporting.
The FRS 105 standard was set out to be a simpler approach to eligible companies in terms of reporting and filing. However, some directors might want to provide more information than the statutory minimum. In those cases, we would ask clients to get in touch with us to decide how we can provide any additional information to assist with the efficient running of your business.