The new Accounting Directive (Directive 2013/34/EU) (link to European Commission website) (among other things) reduces unnecessary and disproportionate administrative costs on small companies by simplifying the preparation of financial statements and reducing the amount of information required by small companies in the notes to financial statements. Under the new Accounting Directive, small companies are only required to prepare a balance sheet, a profit and loss account and notes to meet regulatory requirements.  The new Accounting Directive was published in the Official Journal of the European Union on 29 June 2013 and EU Member States have until 20 July 2015 to incorporate the rules into their national law.  The Department for Business, Innovation and Skills (BIS) is expected to issue a consultation soon on the UK implementation of the new Accounting Directive.  In March 2014, BIS issued a consultation on the UK implementation of the country-by-country requirements for large extractive companies contained within Chapter 10 of the new Accounting Directive.

As a result of the Accounting Directive, the FRC has started a project to review the FRSSE in light of the changes to the small companies’ regime.  In its latest quarterly newsletter, the FRC commented:

As the legal changes to the small companies’ regime will be significant, retaining the FRSSE in its current form is not a realistic option, nor really is having accounting standards for small companies that are based on standards for larger companies that have been withdrawn. We have been giving more thought to how we will replace the FRSSE for small entities and micro-entities, as we develop a consultation document that will seek formal stakeholder feedback.

The FRC is expected to issue a consultation seeking stakeholders’ views on its outline plans for bringing small entities within the scope of FRS 102 (with reduced disclosures) and proposals for a new Financial Reporting Standard for Micro-entities (FRSME) based on the new micro-entities regime.  This consultation will be issued at the same time as the consultation by BIS.

The ICAEW forum is intended to encourage debate about both consultations.  The forum will comprise three short presentations followed by a question and answer session with the panel.  The ICAEW comments:

The proposals are likely to have a major impact on UK financial reporting, especially for small companies. This event will therefore be of particular interest to anyone with an interest in small company reporting in the UK. 

Further information and registration details are available on the ICAEW website.