FRC publishes amended FRSSE (29 April 2014)

The Financial Reporting Council (FRC) has published an amended version of the Financial Reporting Standard for Smaller Entities (FRSSE) for use by micro-entities that want to take advantage of new regulations allowing them to prepare simplified financial statements say Harris & Co accountants Northampton, the specialist small business accountants.

Micro-entities, which are considered the UK’s smallest companies, are defined due to not exceeding two of the three criteria concerning a £632,000 turnover, a balance sheet total of £316,000 and an average number of employees during the financial year of 10.

The amendments mean that these companies will now be able to use the FRSSE when choosing to apply the new micro-entities regime and prepare simplified financial statements with fewer disclosure notes than previously required by the FRSSE.

The micro-entities regime was introduced into UK company law in November 2013 following new EU legislation, the Small Companies (Micro-Entities’ Accounts) Regulations 2013 (SI 2013/3008), which is effective in respect of financial years ending on or after 30 September 2013 for micro-entities filing their accounts or on after 1 December 2013.

Roger Marshall, FRC board member and chair of the Accounting Council, said the amendments were made to bring the FRSSE into line with new regulations.

Marshall said:

‘In consequence, micro-entities that currently prepare their financial statements in accordance with the FRSSE will continue to be able to use the same standard whilst also benefitting from the Government’s simplification of the law. The micro-entities regime will be available to over one and a half million small businesses.’

The amendments to the FRSSE are effective from the same date as the new legislation, financial years ending on or after 30 September 2013 for companies filing their accounts on or after 1 December 2013.