The Financial Reporting Council has today announced plans to withdraw the Financial Reporting Standard for Smaller Entities (FRSSE) within a consultation, in which it is proposing a new standard for micro-entities, FRS 105, The Financial Reporting Standard applicable to the Micro-entities Regime say Harris & Co accountants Northampton, the specialist small business accountants
The FRC said that the consultation will close in April and plans to issue the new standard in July.
This consultation, along with other proposals to amend UK and Irish GAAP, follows publication of government’s decision on the UK implementation of the EU Accounting Directive the FRC has issued its proposals to amend UK and Irish accounting standards.
The FRC has indicated withdrawing the FRSSE for accounting periods beginning on or after 1 January 2016 as well as intentions to issue a new standard for micro-entities offering some simplifications in accounting.
The accounting regulator is also proposing new recognition and measurement requirements for other small companies aligned with new UK GAAP, and disclosure requirements based on the new legal framework.
The proposals include suggestions for greater flexibility in relation to the format of the profit and loss account and balance sheet in FRS 101, allowing the use of IFRS-based presentation requirements similar to those used for group accounts.
According to the FRC, the proposals will benefit 1.5 million of the smallest companies (micro-entities) in the UK by simplifying their reporting requirements.
There will also be changes for the 1.5 million other companies that fall within the ‘small’ company size threshold, including improving accounting for financial instruments and supporting the implementation of legislative changes.