The Impact Of New Legislation On UK Financial Statements

With effect on financial statements commencing the 1st January 2016 onwards, statutory instrument 2015/980 is changing the format of UK accounts.

Let’s look at the main changes for small companies:

  • Small company accounting sizes have raised substantially. This also applies to audit exemption levels.
  • Small Company accounts disclosure requirements are simplified significantly.
  • Abbreviated accounts are abolished although small companies will be able to prepare ‘abridged’ accounts for shareholders and for filing at Companies House. There is no change to the exemptions previously existing for filing accounts in Companies House.

The new size limits for small companies are as follows:

  • Turnover less than £10.2m
  • Gross balance sheet total less than £5.1m
  • Less than 50 employees

Details of some of the disclosure requirements removed included the following:

  • Details of dividends, including the amounts paid in the year for which a liability did not previously exist, the amount the company is liable to pay at the balance sheet date and cumulative dividends in arrears.
  • Details of amounts set aside, withdrawn, or proposed to be set aside or withdrawn from reserves.
  • Share capital, including classes of share capital, nominal values and details of any redeemable shares,
  • Listed investments
  • Information where investment property is included at fair value
  • Movements in reserves and provisions (except the revaluation and fair value reserve)
  • Turnover attributable to geographical markets outside the UK
  • Dormant companies acting as agents
  • Information about related parties (unless not concluded under normal market conditions)
  • Information regarding director’s remuneration

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