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Dormant accounts for active flat management co?

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We have a handful of Flat Management Company clients and we prepare full statutory accounts for each, however we have a new client that has filed Dormant accounts for the last 7 years despite being active in collecting charges and paying expenses as well as holding funds in a company bank account.

I thought the debate on this had been settled and we prepare full accounts, but in talking to a property agent that deals with many of these entities they tell me that 70% of their clients file dormant accounts.

Any thoughts?

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By Wanderer
20th Jun 2019 13:33

NH wrote:

I thought the debate on this had been settled ......

Not seen anything recently, I thought the debate fizzled out without absolute resolution. Having said that I think I remember seeing something a few years after the debate that the way you have been preparing the accounts was correct.
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By johnt27
20th Jun 2019 14:11

It's not surprising really! Many people kicked back against the technical guidance that was jointly issued way back when. It's still in play but was written pre FRS 102/105 days and even the FRC dropped the FRED that was to amend FRSSE and include explanatory paragraphs in both FRSs.

Essentially the FRC's line on this is that by using the FRS's as drafted you should follow the legal position of RMC's when preparing the accounts.

Basically then - we should follow the technical release, but no one (Companies House, property agents, clients etc) knows any better, hence the 70%. If they're unlucky enough to both need an audit (quite a lot have an audit requirement written into their Articles) and meet a switched on auditor it might be a problem...

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