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No change for most micro entities
It is useful to remember that the format and disclosures for micro entity accounts are entirely determined by the Companies Act 2006 (as amended by the micro entity regulations). By law, these disclosures are deemed to provide the true and fair view. Also by law, the directors must disregard additional disclosures required by any accounting standard.
One wonders if the FRC would have used FRS 105 to expand upon the disclosures for micro entities if their hands had not been so carefully tied by the legislators. The FRC cannot even use the true and fair override argument.
FRS 105 restates the relevant disclosure provisions of the Companies Act 2006 (which have not changed) and in effect provides a set of rules for arriving at the amounts in the accounts. Given the simplicity of most micro entities, in a large majority of cases I would expect these amounts to be identical to those arrived at under the FRSSE.
Philip Hodgson
VT Software
135 pages....
for a set of Micro accounts? Give me strength, no wonder the public see us as [***].
i agree with....
our software supplier who will no doubt implement all the relevant changes and ..the accounts look the same and no one notices...he said cynically.
Still it Keeps the boys at HQ out of mischief.
Confusion
What many people find confusing about the ME accounts rules in CA2006 is the apparent conflict between s.393 para 1A (a) and (b) which say, as pointed out above, that the directors must disregard any provision of an accounting standard which would require the accounts to contain further information relating to any item in the ME accounts. So no additional notes are required............
But para 1A (c) then says that where the accounts do contain an item of information additional to the minimum accounting items, the directors must have regard to any provision of an accounting standard which relates to that item. So additional notes might be required?
I've assumed this to mean that if the minimum accounting rules are insufficient to give a true and fair view, additional notes might be required. But then s. 396 para 2A says that the minimum accounting rules are presumed to give a true and fair view. So is that meant to be a rebuttable presumption? Is so, in what circumstances? Will the presumption be rebutted if the ME accounts do not comply with the recognition and measurement provisions of FRS105? But with accounting policies not disclosed, how would that ever be apparent?
Or does s. 393 para 1A (c) simply refer to a situation where the directors decide that they want to disclose something additional for a particular purpose, maybe to make the accounts look better (e.g to explain an exceptional loss in the year, or to mention an event after the balance sheet date)?
Turnover low
Reading this.... A turnover of £632000 seems very low.... Have I understood this correctly?
Whats with numbering
Have I missed something but what about FRS103 and FRS 104?
Why FRS105?
Yes
This is purely for micro-entities: other small companies will be using the small companies' section of FRS102. FRS 103 is Insurance Contracts and 104 is Interim Financial Reporting - can't think how you missed them!
Small companies section in FRS102?
This is purely for micro-entities: other small companies will be using the small companies' section of FRS102. FRS 103 is Insurance Contracts and 104 is Interim Financial Reporting - can't think how you missed them!
I am confused. Which section is that?
FRS102 Section 1.3 suggests small companies may still apply the FRSSE
FRS100 4a suggests the same
while the FRSSE (effective Jan 2015) says the same in par8.
I cannot see a small companies section in FRS102?
Taking up Paul's point above, in an idle moment I compared the number of pages in this FRS105 (for tiny, simple companies) to FRS102 (for all big and complicated companies). Measuring them both on the FRC website versions and excluding the appendices, etc., FRS 102 has 190 pages and FRS105 has 106 - and FRS105 contains no disclosure requirements, of course, only recognition and measurement! Why not just say MEs must follow the measurement and recognition rules in FRS102 (that would be one page)?
Good article.
I like the headline, straight to the point FRSSE replacement set for January 2016
RFS 105,! I am still getting to grips with FRS 102.
Got it
Apologies, got it - FRED 59
We have to appreciate amendments suggested 3 months after the effective date, I suppose
It's in the revised version of FRS102 - I think it will be section 1A. But, as far as I am aware, the thing has not yet been published. I think it's expected "in the summer". This new version will apply to years beginning on 1 January 2016 or later, so FRSSE 2015 will still apply for one year only, but I think you can adopt the new FRS102 early to avoid having to change accounting standards twice in successive years.