FRC issues draft amendments to the FRSSE
10 Dec, 2013
The Financial Reporting Council (FRC) has today issued an Exposure Draft (FRED 52) containing proposed amendments to the Financial Reporting Standard for Smaller Entities (FRSSE) as a result of The Small Companies (Micro-Entities’ Accounts) Regulations 2013 (SI 2013/3008) (“the Regulations”).
The Regulations permit companies qualifying as micro-entities to prepare and file ‘abridged’ accounts for periods ending on or after 30 September 2013 (provided that accounts for such periods have not been filed). This means that they can use simplified formats for the balance sheet and profit and loss account and are only required to provide notes to the financial statements concerning guarantees and other financial commitments and certain transactions with directors.
The FRC propose amendments to the FRSSE to enable micro-entities to state compliance with the FRSSE whilst taking advantage of the exemptions contained within the Regulations. The proposed amendments also avoid the potential conflict with the law under which the accounts are deemed to give a true and fair view without supplementary information.
The proposed amendments reflect the new primary statement format available in the Regulations and permit micro-entities to disapply all presentation and disclosure requirements of the FRSSE except those that are required by the Regulations. The proposed amendments do not affect the recognition or measurement of amounts included in the financial statements of micro-entities.
The FRC expects a more comprehensive revision to the FRSSE when the EU Accounts Directive (2013/34/EU) has been incorporated into UK law. At that time it will “reconsider how best to present the accounting standard requirements for micro-entities, which may include issuing an accounting standard for micro-entities separately from the accounting standard applied by other small entities”.
The FRC invite written comments on FRED 52 until 12 February 2014.
Click for:
- FRC press release (link to FRC website).
- FRED 52 ‘Draft amendments to the Financial Reporting Standard for Smaller Entities (effective April 2008) (link to FRC website).
- UK Accounting Plus earlier story on the Regulations.
- Deloitte ‘Need to know’ on the Regulations.