Statutory Accounts

Every UK company, no matter how small, must file accounts at Companies House each year. These accounts must be prepared in accordance with both the law and formal accounting standards and they must be filed within certain deadlines. Moreover, every shareholder must receive a set of these accounts (unless they have opted to waive them or receive an abridged version instead) and HM Revenue & Customs will expect to receive a set with the corporation tax return.

The level of disclosure varies according to the size and type of company. Most companies will be able to take advantage of the FRSSE (Financial Reporting Standard for Smaller Entities) which greatly reduces the amount of disclosure required. Companies that are too large to use the FRSSE currently have a choice of either preparing their accounts in accordance with the Companies Act 2006 in conjunction with UK GAAP (Generally Accepted Accounting Principles) or basing them on EU adopted IFRS (International Financial Reporting Standards). Companies that are publicly accountable (e.g. quoted on a recognised stock exchange) and have subsidiaries are already required to prepare their consolidated accounts in accordance with EU adopted IFRS.

Smaller companies also have the option of filing abbreviated accounts at Companies House. These do not take the place of the full accounts as these must still be prepared for the shareholders and the tax authorities but they do enable a company to restrict the amount of information that is publicly available. For example, most small companies do not have to file a Profit & Loss Account or a Directors’ Report.

In addition to this, most small companies are able to take advantage of audit exemption. There once was a time when every UK company, even the tiniest, had to have its annual accounts audited. Obviously this was quite costly for the vast majority of companies which are both fairly small and owned and managed by the same people. It was finally decided to remove the audit requirement for the smallest companies in 1993. Since then, the thresholds for audit exemption have gradually risen in line with EU legislation and currently stand at £6.5 million for turnover and £3.26 million for the balance sheet total.

At Acumen we can prepare your Statutory Accounts either from a Trial Balance prepared by your own book-keepers or from the accounting records themselves. We can also prepare your accounting records from basic information provided by you if you sign up to our Book-Keeping service. Please give us a call if you would like any help preparing your annual accounts.

Meanwhile, the following Information Sheets and Accounting Tips will tell you more.

Information Sheets		Accounting Tips
Dormant accounts FRSSE accounts Abbreviated accounts International standards Consolidated accounts Late filing penalties Accounting periods Audit exemption		Provisions Check that all provisions such as deferred tax and bad debts are updated and any irrecoverable amounts are written off. Contingent liabilities Review any outstanding legal cases or other potential losses and ensure that disclosures are made in accordance with FRS 12. Participator loans Try to avoid outstanding loans to connected persons at the year end - if you do have any make sure they are cleared within 9 months. Transactions with directors Make sure all transactions with directors are disclosed in the accounts, including those with companies under common control.