In December 2015, we blogged about the new optional accounting standard, called FRS105, which is for micro entities and how their company’s accounts are prepared and filed at Companies House. For those companies that qualify to use this new accounting standard, we consider here whether it’s worth adopting this new set of accounting principles early. As a reminder, while it comes into force for accounting periods commencing in 2016, it can be adopted for the 2015 year end.
A decision for directors and owners of many small companies will be whether to stick with the current accounting standards and methodologies of preparing the company’s accounts for one last year, or whether to adopt the new methodologies early?
One benefit of early adoption is the reduced amount of information in the accounts that will be on public record. For example, the format of a balance sheet will be condensed to just display the main headings such as Current Assets and it may mean that accounts filed at Companies House will fit onto one single page.
Unlike Companies House, at the moment, HM Revenue and Customs does not offer the option of filing the CT600 (Corporation Tax Return) in a paper format. HMRC are preparing to upgrade its electronic system in April 2016, at which point the new format FRS105 accounts can be attached to the CT600 submissions.
If you prefer lower disclosure requirements that FRS105 can provide, then early adoption could be better for you.
For more information or advice on FRS105, please email Helen Clayton on firstname.lastname@example.org or call 01254 679131.