FRS105 criteria exceeded for 2 years

FRS105 criteria exceeded for 2 consecutive years - Prepare under FRS102 from Y2 or Y3?

Didn't find your answer?

We have a small company client that has traded within the FRS105 criteria for many years.  Company has now had 2 bumper years (ie significantly exceeding FRS105 criteria) and will then return below FRS105 criteria levels.

Do we have to prepare under FRS102 for the second of those 2 bumper years and the following year?

FRS 105 says:

A3.4 For any company, other than a newly incorporated company, to qualify as a microentity, the qualifying conditions must be met for two consecutive years. A company will cease to qualify as a micro-entity if it fails to meet the qualifying conditions for two consecutive years. However, if a company which qualified as a micro-entity in one period no longer meets the criteria for a micro-entity in the next period, the company may continue to claim the exemptions available in the next period. If that company then reverts back to being a micro-entity by meeting the criteria, the exemptions will continue uninterrupted.

but there are two "next period" statements within that and not sure whether they both refer to the same "next period" or whether this means a "next period" and then the "next next period"!

Frazzled on a Friday night when I should be drinking wine!

Replies (2)

Please login or register to join the discussion.

avatar
By Paul Crowley
06th Nov 2020 19:52

Do we have to prepare under FRS102 for the second of those 2 bumper years and the following year?

Yes to both

Thanks (2)
Replying to Paul Crowley:
avatar
By MC1
09th Nov 2020 19:59

Thank you

Thanks (0)