Directors' advances and credits

Directors' advances and credits

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I've always thought it strange that the minimum disclosure only wants directors' advances in credits if the directors' current accounts are overdrawn but I've followed the minimum rules regardless.

I recently saw a set of accounts that showed the opening and closing balances also. This seemed a much more sensible approach. Does anybody else do this? Are there any disadvantages?

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By TerryD
10th Feb 2016 15:55

It depends if you're talking about full or abbreviated accounts, FRSSE, micro-entity, or FRS102.

Minimum disclosure on small company abbreviated accounts (while ever such things exist) is just to report the required details of each advance, but that is usually interpreted as giving the details (amount, amounts repaid/written off/waived, main conditions, interest rate) of any loan accounts with a debit balance, even though, strictly, it probably means taking each individual debit to the loan account as a separate advance and giving the details for each one. Details of guarantees are also required.

In the full accounts, of course, FRSSE and FRS102 requirements would mean disclosure being made of transactions on current accounts in credit too.

For micro-entities, the requirements are the same as abbreviated accounts.

Some accounts preparers, when preparing abbreviated accounts, do leave in the full related parties disclosure note from the full accounts. I guess this is sometimes done so as to avoid having to think about whether the disclosure is actually required, sometimes out of laziness, sometimes they might want to publish the details (to show how much the director is putting into the company) and, maybe, sometimes its just a mistake.

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