The Small Companies (Micro-Entities’ Accounts) Regulations 2013 came into force on 1 December 2013 and apply to accounting years ending on or after 30 September 2013. So a company that qualifies as a micro-entity can now prepare its accounts in compliance with these regulations if its accounting year ended on or after 30 September 2013.
What is a micro-entity?
A company will need to meet at least two out of the following three thresholds to qualify as a micro-entity:
• Turnover: Not more than £632,000
• Balance sheet total: Not more than £316,000
• Average number of employees: Not more than 10
The turnover limit is adjusted proportionately if the financial year is longer or shorter than twelve months.
Specifically excluded entities
An entity that is excluded from being a small company will not qualify as a micro-entity. Further, charities and LLPs are excluded so are investment undertakings, financial holding and insurance undertakings, credit institutions, qualifying partnerships, overseas companies, unregistered companies and companies authorised to register pursuant to s1040 of the Companies Act 2006.
Group situations
A parent company can only qualify as a micro-entity for the purposes of its individual accounts if it qualifies as a micro-entity individually and the group headed by it qualifies as small. Also, a parent company that prepares group accounts cannot qualify as a micro-entity for the purposes of its individual accounts.
Main features of micro-entity reporting
Simpler balance sheet and profit and loss account presentation as given below.. However, the director’s report requirements still apply.
Balance sheet format – option 1
A Called up share capital not paid
B Fixed assets
C Current assets
D Prepayments and accrued income
E Creditors: amounts falling due within one year
F Net current assets (liabilities)
G Total assets less current liabilities
H Creditors: amounts falling due after more than one year
I Provisions for liabilities
J Accruals and deferred income
K Capital and reserves
Balance sheet format – option 2
ASSETS
A Called up share capital not paid
B Fixed assets
C Current Assets
D Prepayments and accrued income
LIABILITIES
A Capital and reserves
B Provision for liabilities
C Creditors*
D Accruals and deferred income
*Aggregate amounts falling due within one year and after one year must be shown separately.
Profit and loss account format
A Turnover
B Other income
C Cost of raw materials and consumables
D Staff costs
E Depreciation and other amounts written off assets
F Other charges
G Tax
H Profit or loss
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