UK simplifies financial statements

Following the decision of the British Government to implement the EU Accounting Directive the United Kingdom Financial Reporting Council (FRC) has issued its proposals on the amendments of accounting standards.

FRC confirmed that the suggested measures will improve positions of 1.5 million “micro-businesses” and will also bring some changes to the activity of 1.5 million companies belonging to “small” business.

Thus, in accordance with the EU Directive, all companies may be divided into micro, small, medium and large, depending on the number of employees, balance and turnover. The UK Government decided to set certain boundaries in order to determine the category, under which the company falls, for the purposes of accounting conduction.

“Micro-company” is a company with the max turnover of GBG 632.000 (USD 971.400), with the balance equal of less than GBP 321.000 and the number of employees not more than 10. The “small company” is a company with under GBP 10.2 million turnover, GBP 5.1 million cash and not more than 50 people.

The companies meeting the abovestated criteria will be subjects to a major simplification of the financial statements.

New rules are expected to come into force for accounts following the 1 January 2016.

Source:

https://www.frc.org.uk/News-and-Events/FRC-Press/Press/2015/February/FRC-consults-on-amendments-to-UK-and-Irish-GAAP.aspx