It’s currently our peak filing period for accounts and as we’ve seen a number of changes to accounts filing requirements over the past year I thought it would be useful to publish a blog talking about some of these changes.
I also wanted to highlight some very helpful guidance that the Institute of Chartered Accounts for England & Wales (ICAEW) have put together. Companies will find this very helpful when preparing their accounts under the new legislation. The guidance has been produced by accountancy experts and it’s really worth looking at if you’re seeking further information.
Recent changes to UK company law removed the option for small companies to file an abbreviated version of their full accounts with Companies House for periods beginning on or after 1 January 2016. Small companies are, however, still able to take advantage of certain reduced filing options. ICAEW’s Financial Reporting Faculty has published this helpful document answering frequently asked questions about the filing options available under the new small companies regime.
The Financial Reporting Faculty provides its members with clear and accessible assistance across a spectrum of financial reporting issues, keeping them up to date with changing regulations and standards. You can find out more about the faculty and its range of online services.
Other changes that companies should be aware of are:
Abbreviated accounts abolished
The Companies, Partnerships and Groups (Accounts and Reports) Regulations 2015 abolished abbreviated accounts. This means that abbreviated accounts cannot be filed for accounting periods beginning on or after 1 January 2016.
Introducing abridged accounts
The Companies, Partnerships and Groups (Accounts and Reports) Regulations 2015 also introduced the concept of abridged accounts. Abridged accounts contain a balance sheet that contains a sub-set of the information that is included in a full balance sheet. Likewise, the profit and loss account may also contain a sub-set of the information that is included in a full profit and loss account.
Only small companies and LLPs may prepare abridged accounts
Abridged accounts will be identified by a statement containing wording to the effect of the 'members have consented to the abridgement'.
Companies may choose to prepare accounts in accordance with the new regulations for accounting periods that begin on or after 1 January 2015. They must prepare accounts in accordance with the new regulations for accounting periods that begin on or after 1 January 2016.
The difference between abridged and abbreviated
Companies must now prepare and file the same set of accounts for its members as for the public record. This means that a company will decide at the point they are preparing their accounts whether or not to abridge them (or to prepare micro entity accounts). Previously a company would prepare full accounts for its members and would then decide whether or not to abbreviate them for the public record.
A small company now has the following options when preparing their accounts
For accounting periods that start on or after 1 January 2016 small companies basically have 3 choices: they may prepare micro-entity accounts (if they’re within the threshold), they may prepare abridged accounts or they may prepare a full accounts. In all cases a small company can choose whether or not to file their director’s report and profit and loss account. Companies that don’t opt to file their director’s report and profit and loss are said to be filing “filleted” accounts (in every case the company must file at least the balance sheet & any related notes).
Small companies which have had a voluntary audit may choose not to file their auditor’s report
A small company which has chosen to not file its profit and loss account may also opt not to file a copy of the auditor’s report on their accounts. In this case they must make the following disclosures in the notes to their accounts: the auditor’s name (if the auditor was a firm, the name of the senior statutory auditor), whether the auditor’s report was qualified or unqualified, and, if the report was qualified, what the qualification was.