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Section 1 – Introduction

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Overview and Who Can Avail

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True & Fair & Basic FS Presentation

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Abridged, Adapted and Abrieviated FS

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Minimum Note Disclosure Requirements

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Section Downloads

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Contents

1A.1 Scope 

1A.1.1 Extract from FRS102: Section 1A.1-1A.4 

1A.2 OmniPro comment 

1A.2.1 Section 1A and UK Companies. 

1A.2.2.3 What remains the same?. 

1A.2.2.4 What is different?. 

1A.2.2.5 What is new?. 

1A.2.2.6 What is different when compared to FRSSE/FRS 102 & old Small Companies Regime pre SI 980/2015?

1A.2.2 Section 1A – As applicable to the republic of Ireland

1A.2.2.1 Overview

1A.2.2.2 Which companies can avail of Section 1A/Small Company’s regime?

1A.2.2.3 What remains the same?

1A.2.2.4 What is different?

1A.2.2.5 What is new?

1A2.3 Choice to apply section 1A of FRS 102

1A.3 True and fair view

1A.3.1 Extract from FRS102: Section 1A.5-.1A.6

1A.3.2 OmniPro comment – True and fair view

1A.4 Complete set of financial statements of a small entity

1A.4.1 Extract from FRS102: Section 1A.7-1A.11, Section 1AD.1 and Section 1A.16-1A.20

1A.4.2 OmniPro comment

1A.4.2.1 What Section 1 means in practical terms?

1A.4.2.2 The minimum disclosure requirements and the requirements to still show a true and fair view

1A.4.2.3 Disclosure encouraged under S.1A

1A.4.2.4 Formats of Balance Sheet and profit and Loss Account

1A5 Information to be presented in the statement of financial position

1A5.1 Extract from FRS102: Section 1A.12-1A.13

1A5.2 OmniPro comment

1A6 Information to be presented in the income statement

1A6.1 Extract from FRS102: Section 1A.14-1A.15

1A6.2 OmniPro comment

1A7 Voluntary preparation of consolidated financial statements

1A7.1 Extract from FRS102: Section 1A.21-1A.22

1A7.2 OmniPro comment

1A8 Appendix A to Section 1A

1A8.1.1 Guidance on adapting the balance sheet formats

1A8.1.1.1 Extract from FRS102: Section 1AA.1

1A8.1.1.2 OmniPro comment

1A8.1.1.2.1 Overview

1A8.1.1.2.2 Required formats for entities

1A8.1.1.2.2.1 Overview

1A8.1.1.2.2.2 Format 1 – Balance sheet – set out in legislation – Schedule 3A

1A8.1.1.2.2.3: Format 2 – balance sheet – set out in legislation – Schedule 3A

1A8.1.1.2.2.4 Example – Format 1 – Balance sheet – practical application

1A8.1.1.2.2.5 Notes required to balance sheet

1A8.2.1 Abridged balance sheet

1A8.2.1.1 Extract from FRS102: Section 1AA.2

1A8.2.1.2 OmniPro comment

1A8.2.1.2.1 Example of abridged balance sheet layout

1A8.2.1.2.2 Notes required to balance sheet

1A8.3.1 Adapted balance sheet

1A8.3.1.1 Extract from FRS102: Section 1AA.3-1AA.6

1A8.3.1.2 OmniPro comment

1A8.3.1.2.1 Overview

1A8.3.1.2.2 Example adapted/IFRS layout – Balance sheet

1A9 Appendix B to Section 1A

1A9.1.1 Guidance on adapting the profit and loss account formats

1A9.1.1.1 Extract from FRS102: Section 1AB.1

1A9.1.1.2 OmniPro comment

1A9.1.1.2.1 Analysis

1A9.1.1.2.2 Application of format 1 profit and loss account set out in legislation

1A9.1.1.2.3 Application of format 2 – profit and loss account set out in legislation

1A9.1.1.2.4 Example format 1 – profit and loss account.

1A9.1.1.2.5 Notes required to profit and loss account at a minimum

1A9.9.1.2.5.1 Consolidated profit and loss note requirements

1A9.2 Abridged Profit and Loss Account

1A9.2.1 Extract from FRS102: Section 1AB.2

1A9.2.2 OmniPro comment

1A9.2.2.1 UK entities

1A9.2.2.1.1 Approval of the adopted layout

1A9.2.2.1.2 Example of abridged profit and loss account

1A9.2.2.2 Republic of Ireland

1A9.3 Adapted Profit and Loss Account

1A9.3.1 Extract from FRS102: Section 1AB.3-1AB.4

1A9.3.2 OmniPro comment

1A9.3.2.1 Analysis

1A9.3.2.2: Example adapted/IFRS layout on the profit and loss accounts

1AC10 Appendix C to Section 1A (Applicable for UK entities)

1AC10.1 Disclosure requirements for small entities

1AC10.1.1 Extract from FRS102: Section 1AC.1-1AC.2

1AC10.1.2 OmniPro Comment

1AC10.1.2.1 Overview

1A10.1.2.2 What entities must comply with Appendix C

1AC10.2 Accounting policies

1AC10.2.1 Extract from FRS102: Section 1AC.3-1AC.

1AC10.2.2 OmniPro comment

1AC10.2.2.1 Overview

1AC10.2.2.1.1 Accounting police disclosure

1AC10.2.2.1.1.2 Basis of preparation

1AC10.2.2.1.1.3 Consolidation

1AC10.2.2.1.1.4 Basis of consolidation (if applicable)

1AC10.2.2.1.4.1 Subsidiary undertakings

1AC10.2.2.1.1.4.2 Associates and joint ventures

1AC10.2.2.1.1.5 Business combinations and goodwill [if applicable]

1AC10.2.2.1.1.6 Goodwill

1AC10.2.2.1.1.7 Impairment

1AC10.2.2.1.1.8 Intangible assets

1AC10.2.2.1.1.9 Contingent acquisition consideration

1AC10.2.2.1.1.10 Financial assets

1AC10.2.2.1.1.11 General turnover accounting policy notes

1AC10.2.2.1.1.11.1 Turnover

1AC10.2.2.1.1.11.2 Turnover accounting policy for an insurance broker Turnover – commission income

1AC10.2.2.1.1.11.3 Turnover accounting policy for a manufacturng company that produces, install and also engage in long term contracts using the stage of completion using the contract activity

1AC10.2.2.1.1.11.4 Turnover accounting policy note where turnover is derived from investments

1AC.10.2.2.1.1.11.5 Turnover accounting policy for a software

1AC10.2.2.1.1.11.6 Turnover accounting policy for a construction company

1AC10.2.2.1.1.11.7 Accounting policy where agreement exists for construction of real estate where recognised only when risk and reward transfer as opposed to using percentage completion

1AC10.2.2.1.1.12 Government grants

1AC10.2.2.1.1.12.1 Accruals model

1AC10.2.2.1.1.12.2 Performance model

1AC10.2.2.1.1.13 Dividend income

1AC10.2.2.1.1.14 Dividend distribution

1AC10.2.2.1.1.15 Currency

1AC10.2.2.1.1.16 Financial instruments

1AC10.2.2.1.1.16.1 Trade and other debtors

1AC10.2.2.1.1.16.2 Cash and cash equivalents.

1AC10.2.2.1.1.16.3 Other financial assets.

1AC10.2.2.1.1.16.4 Trade and other creditors.

1AC10.2.2.1.1.16.5 Borrowings

1AC10.2.2.1.1.16.7 Offsetting financial instruments.

1AC10.2.2.1.1.17 Compound financial instruments.

1AC10.2.2.1.1.18 Derivatives

1AC10.2.2.1.1.19 Hedge accounting

1AC10.2.2.1.1.20 Provisions

1AC10.2.2.1.1.20.1 Environmental liabilities

1AC10.2.2.1.1.20.2 Closure costs

1AC10.2.2.1.1.21 Contingencies

1AC10.2.2.1.1.22 Employee Benefits

1AC10.2.2.1.1.23 Preference share capital

1AC10.2.2.1.1.24 Share capital

1AC10.2.2.1.1.25 Related party transactions

1AC10.2.2.1.1.26 Interest income

1AC10.2.2.1.1.27 Taxation

1AC10.2.2.1.1.28 Tangible fixed assets

1AC10.2.2.1.1.29 Stocks

1AC10.2.2.1.1.30 Investment properties

1AC10.2.2.1.1.31 Leases

1AC10.2.2.1.1.31.1 Finance leases

1AC10.2.2.1.1.31.2 Operating leases

1AC10.2.2.1.1.31.3 Lease incentives

1AC10.2.2.1.1.32 Leasing company accounting policy

1AC10.2.2.1.1.33 Intangible assets

1AC10.2.2.1.1.34 Goodwill

1AC10.2.2.1.1.35 Exceptional items

1AC10.2.2.1.1.36 Share based costs

1AC10.2.2.1.1.37 Investment properties

1AC10.2.2.1.1.38 Biological assets (where fair value is used)

1AC10.2.2.1.1.39 Biological assets – Livestock (where fair value model is adopted)

1AC10.2.2.1.1.40 Biological assets – Forestry (where cost model is adopted)

1AC10.2.2.1.1.41 Biological assets – Livestock (where cost model is adopted)

1AC10.3 Changes in presentation and accounting policies and corrections of prior period errors

1AC10.3.1 Extract from FRS102: Section 1AC.7-1AC.9

1AC10.3.2 OmniPro comment

1AC10.3.2.1 Analysis

1AC10.3.2.2. Prior period adjustment disclosure

1AC10.3.2.2.1 Option 1 – Analysis of prior period adjustments

1AC10.3.2.2.2 Option 2: Analysis of prior period adjustments

1AC10.3.2.2.2.3 Profit and Loss reserves note/statement of changes in equity

1AC10.3.2.2.3 Statement in changes in equity note – prior period error/change in accounting policy

1AC10.3.2.2.4 Illustration of change in accounting policy disclosure

1AC10.3.2.2.4.1 Example extract of a change in accounting policy disclosure

1AD11.3.2.5 Change in classification from prior period

1AC10.4 True and fair override

1AC10.4.1 Extract from FRS102: Section 1AC.10

1AC10.4.2 OmniPro comment

1AC10.4.2.1 Analysis

1AC10.5 Notes supporting the statement of financial position

1AC10.5.1 Extract from FRS102: Section 1AC.11-1AC.19

1AC10.5.2 OmniPro comment

1AC10.5.2.1 Property, plant and equipment/tangible fixed assets. Including revaluation

1AC 10.5.2.1.1 Borrowing costs

1AC10.5.2.2 Intangible assets including revaulation

1AC10.5.2.3 Financial assets– note where a joint venture, subsidiary or associate is fair valued through OCI and the others are stated at cost

1AC10.5.2.4 Illustration of the revaluation reserve disclosures.

1AC10.5.2.5 Investment properties note

1AC10.5.2.6 Alternative layout for the investments note and illustration of financial assets

1AC10.6 Details of indebtness and securities held (if any) 91

1AC10.6.2 Extract from FRS 102: Section 1AC.27

1AC10.6.2 OmniPro comment

1AC10.7 Impairment of assets

1AC10.7.1 Extract from FRS102: Section 1AC.20-1AC.21

1AC10.7.2 OmniPro comment

1AC10.8 Fair value measurement

1AC10.8.1 Extract from FRS102: Section 1AC.22-Section 1AC.24 and section 1AC.26

1AC10.8.2 OmniPro comment

1AC10.8.2.1 Analysis

1AC10.8.2.2 Extract from the notes to the financial statements – note on investment property

1AC10.8.2.3 Investment note with investment in subsidiary, joint ventures and other investments

1AC10.8.2.4 Extract of notes to the financial statements – Financial instruments note disclosures

1AC10.8.2.4.1 Extract of notes to the financial statements – Interest receivable and similar income

1AC 8.2.4.2 Extract of notes to the financial statements – interest payable and similar expenses

1AC10.8.2.4.3 Alternative disclosure for profit and loss

1AC10.8.2.4.4 Extract from other comprehensive income showing activity on cash flow hedges:

1AC10.8.2.4.4.1 Cash flow fair value hedge reserve disclosure requirements:

1AC10.9 Indebtedness, guarantees and financial commitments

1AC10.9.1 Extract from FRS102: Section 1AC.27-1AC.31

1AC.10.9.2 OmniPro comment

1AC.10.9.2.1 Overview

1AC10.9.2.2 Contingencies note

1AC10.9.2.3 Off-balance sheet arrangements note (section 1AC.31 od Appendix C of FRS 102)

1AC10.9.2.4 Commitments notes (section 1AC.31 of Appendix C of FRS 102)

1AC10.9.2.5 Indebtness note and security disclosures

1AC10.10 Notes supporting the income statement / profit and loss accounts

1AC10.10.1 Extract from FRS102: Section 1AC.32-1AC.33

1AC10.10.2 OmniPro comment

1AC10.10.2.1 Overview

1AC10.10.2.2 Extract to show required profit and loss disclosures

1AC10.10.2.2.1 Exceptional item defined and the disclosure requirements

1AC10.10.2.2.2 Exceptional item disclosure

1AC10.10.2.3 Employee numbers disclosure:

1AC10.10.2.4 Other profit and loss disclosures

1AC10.11 Related party disclosures

1AC10.11.1 Extract from FRS102: Section 1AC.34-1AC.36

1AC10.11.2 OmniPro comment

1AC10.11.2.1 Overview

1AC10.11.2.1.1 Related party defined

1AC10.11.2.1.2 Aggregation

1AC10.11.2.2 Related party note – with related entities

1AC10.11.2.3 Loans, guarantees, credit transactions entered into the benefit of directors

1A10.11.2.3.1 Guarantees

1AC10.11.2.4 Directors remuneration

1AC10.11.2.5 Dividends

1AC10.11.2.6 Other related party transactions (concluded under non market conditions) including transactions with directors

1AC10.11.7 Controlling Party disclosure

1AC10.12 Other – Post balance sheets events, disclosure of registered office, form, if accounts are prepared on a basis other than going concern

1AC10.12.1 Extract from FRS102: Section 1AC.37-1AC.39

1AC10.12.2 OmniPro comment

1AC10.12.2.1 Disclosures required describing the entity

1AC10.12.2.2 Post balance sheet events

1AC10.13 Disclosure required by Companies Act formats and other Companies Act disclosures not dealt with elsewhere

1AC10.13.1 Auditors remuneration, Interest income or expense from loans to and from group entities

1AC10.13.1.1 Interest income or expense from loans to and from group entities

1AC10.13.1.2 Auditors remuneration

1AC10.13.2 Debtors and Creditors Note as required by Formats

1AC10.13.3 Share capital disclosures

1AC10.13.4 Disclosure of items in a number of lines on the balance sheet and not disclosed separately in each of the relevant notes

1AD11 Appendix D to Section 1A (applicable for Republic of Ireland entities only)

1AD11.1 Disclosure requirements for small entities in the Republic of Ireland

1AD11.1.1 Extract from FRS102: Section 1AD.1-1AD.2

1A11.1.2 OmniPro comment

1A11.1.2.1 Analysis

1A11.1.2.1 Summary section 1A disclosure checklist

1AD11.2 Accounting policies

1AD11.2.1 Extract from FRS102: Section 1AD.3-1AD.6

1AD11.2.2 OmniPro Comment

1A11.2.2.1 Accounting policy disclosure Note example (as required by section 1AD.3 to 1AD.5 of Appendix D of Section 321 of Companies Act 2014)

1AD11.2.2.1.1 General information

1AD11.2.2.1.2 Basis of preparation

1AD11.2.2.1.3 Consolidation exemption

1AD11.2.2.1.4 Basis of consolidation – (If Applicable)

1AD11.2.2.1.4.1 Subsidiary undertakings

1AD11.2.2.1.4.2 Associates and joint ventures

1AD11.2.2.1.4.3 Transactions eliminated on consolidation

1AD11.2.2.1.5 Business combinations and goodwill

1AD11.2.2.1.6 Goodwill

1AD11.2.2.1.7 Impairment

1AD11.2.2.1.8 Intangible assets

1AD11.2.2.1.9 Contingent acquisition consideration

1AD11.2.2.1.10 Financial assets

1AD11.2.2.1.11 Turnover

1AD11.2.2.1.11.1 General turnover accounting policy notes

1AD11.2.2.11.2 Turnover accounting policy for an insurance broker

1AD11.2.2.11.3 Turnover accounting policy for a manufacturing company that produces, install and also engage in long term contracts using the stage of completion using the contract activity

1AD11.2.2.11.4 Turnover accounting policy note where turnover is derived from investments Turnover

1AD11.2.2.11.5 Turnover accounting policy for a software company

1AD11.2.2.11.6 Turnover accounting policy for a construction company

1AD11.2.2.11.7 Accounting policy where agreement exists for construction of real estate where recognised only when risk and reward transfer as opposed to using percentage completion

1AD11.2.2.12 Government grants

1AD11.2.2.12.1 Accruals model

1AD11.2.2.12.2 Performance model

1AD11.2.2.13 Dividend income

1AD11.2.2.14 Dividend distribution

1AD11.2.2.15 Currency

1AD11.2.2.16 Financial instruments

1AD11.2.2.16.1 Trade and other debtors

1AD11.2.2.16.2 Cash and cash equivalents.

1AD11.2.2.16.3 Other financial assets.

1AD11.2.2.16.4 Trade and other creditors.

1AD11.2.2.16.5 Borrowings

1AD11.2.2.16.6 Derecognition.

1AD11.2.2.16.7 Offsetting financial instruments.

1AD11.2.2.17 Compound financial instruments.

1AD11.2.2.18 Derivatives

1AD11.2.2.19 Hedge accounting

1AD11.2.2.20 Provisions

1AD11.2.2.20.1 Environmental liabilities

1AD11.2.2.20.2 Closure costs

1AD11.2.2.21 Contingencies

1AD11.2.2.22 Employee Benefits

1AD11.2.2.23 Preference share capital

1AD11.2.2.24 Share capital

1AD11.2.2.25 Related party transactions

1AD11.2.2.26 Interest income

1AD11.2.2.27 Taxation

1AD11.2.2.28 Tangible fixed assets

1AD11.2.2.29 Stocks

1AD11.2.2.30 Investment properties

1AD11.2.2.31 Leases

1AC10.2.2.1.1.31.1 Finance leases

1AD11.2.2.31.2 Operating leases

1AD11.2.2.31.3 Lease incentives

1AC10.2.2.1.1.32 Leasing company accounting policy

1AD11.2.2.33 Intangible assets

1AD11.2.2.34 Goodwill

1AD11.2.2.35 Exceptional items

1AD11.2.2.36 Share based costs

1AD11.2.2.37 Investment properties

1AD11.2.2.38 Biological assets (where fair value is used)

1AD11.2.2.39 Biological assets – Livestock (where fair value model is adopted)

1AD11.2.2.40 Biological assets – Forestry (where cost model is adopted)

1AD11.2.2.41 Biological assets – Livestock (where cost model is adopted)

1AD11.2.2.1.42 Prior period adjustment – Change in accounting policy

1AD11.2.2.43 Change in accounting estimate

1AD11.2.2.44 Exceptional item

1AD11.3 Changes in presentation and accounting policies and corrections of prior period errors

1AD11.3.2 Extract from Section 1AD.8 to 1AD.10 of S1A of FRS 102

1AD11.3.2 OmniPro comment

1AD11.3.2.1 Analysis

1AD11.3.2.2 Prior year adjustment disclosure

1AD11.3.2.2.1 Option 1: Analysis of prior year adjustments

1AD11.3.2.2.2 Option 2 – Analysis of prior year adjustments

AD11.3.2.2.3 Movement in profit and loss reserves note or statement of changes in equity

1AD11.3.2.4 Example extract of a change in accounting policy disclosure

1AD11.3.2.5 Change in classification from prior period

1AD11.4 True and fair view override

1AD11.4.1 Extracts from FRS 102: Section 1AD.11

1AD11.4.2 OmniPro comment

1AD11.4.2.1 Analysis

1AD11.5 Notes to the statement of financial position – fixed assets

1AD11.5.1 Extract from FRS 102: Section 1AD.13 – 1AD.18

1AD11.5.2 OmniPro comment

1AD11.5.2.0 Overview

1AD11.5.2.1 Extract of notes to the Balance Sheet for fixed assets to comply with the requirements of Section 1A for ROI entities

1AD11.5.2.1.1 Extract from the notes to the financial statements – property, plant and equipment note

1AD11.5.2.1.2 Borrowing costs

1AD11.5.2.1.3 Intangible assets

1AD11.5.2.1.4 Financial assets, joint venture, subsidiary or associate fair value through OCI with others stated at cost

1AD11.5.2.1.5 Example disclosure for a revaluation reserve

1AD11.5.2.1.6 Investment properties

1AD11.5.2.1.7 Financial assets note

1AD11.6 Impairments of assets

1AD11.6.1 Extracts from FRS 102: Section 1AD.20 – 1AD.21

1AD11.6.2 OmniPro comment

1AD11.7 Borrowing/creditors details

1AD11.7.1 Extracts from FRS 102: Sction 1AD.26 – 1AD.28

1AD11.7.2 OmniPro Comment

1AD11.8 Appropriation of profit or loss/profit and loss reserve movements

1AD11.8.1 Extract from FRS 102: Section 1AD.35

1AD11.8.2 OmniPro comment

1AD11.9 Fair value measurement

1AD11.9.1 Extract from FRS 102; Section 1AC.22 to 1AC.25

1AD11.9.2.1 Analysis – fair value disclosure requirements

1AD11.9.2.2 Extract from the notes to the financial statements

1AD11.9.2.2.1 Investment property

1AD11.9.2.2.2 Financial assets notes – investment in joint venture, subsidiary or associate measured at fair value through profit and loss.

1AD11.9.2.2.3 Financial instrument note disclosures

1AD11.9.2.2.4 Fair value reserve disclosures

1AD11.10 Notes to the income statements/profit and loss account

1AD11.10.1 Extract from FRS 102: Sections 1AD.36 to 1AD .37

1AD11.10.2 OmniPro comment

1AD11.10.2.1 Overview

1AD11.10.2.2 Extract to show required profit and loss disclosures

1AD11.10.2.2.1 Exceptional item defined and the disclosure requirements

1AD11.10.2.2.1.1 Exceptional item disclosure

1AD11.10.2.2.2 Employee note disclosure

1AD11.10.2.2.3 other profit and loss disclosures

1AD11.11 Related party disclosures – director’s remuneration

1AD11.11.1 Extract from FRS 102: sections 1AD.38 to 1AD.40

1AD11.11.2 OmniPro comment

1AD11.11.2.1 Related parties defined

1AD11.11.2.1.1 Connected person defined

1AD11.11.2.2 Directors remuneration disclosure

1AD11.11.2.2.1 Make up of director’s remuneration

1AD11.12 Related part disclosures – loans, quasi – loans and credit transactions entered into for the benefit of directors.

1AD11.12.1 Extracts from FRS 102: 1AD.41 to 1AD.47

1AD11.12.2 OmniPro Comment

1AD11.12.2.1 Analysis

1AD11.12.2.1.1 Application to non-companies

1AD11.12.2.1.2 Get out from disclosure if below a specified value.

1AD11.12.2.2 Disclosures of loans and guarantees for the benefit of directors.

1AD11.13 Related party transactions material transactions with directors

1AD11.13.1 Extracts from FRS 102: Secton 1AD.48

1AD11.13.2 OmniPro comment

1AD11.13.2.1 Analysis

1AD11.13.2.2 Is there exemptions from the disclosure?

1AD11.13.2.3 Disclosure

1AD11.14 Other related party transactions (other than transactions with director)

1AD11.14.1 Extracts from FRS 102: Section 1AD.51

1AD11.14.2 OmniPro comment

1AD11.15 Ultimate controlling party

1AD11.15.1 Extract from FRS 102: Section 1A.50

1AD11.15.2 OmniPro comment

1AD11.16 Post balance sheet events

1AD11.16.1 Extracts from FRS 102: Sections 1A.54

1AD11.16.2 OmniPro comment

1AD.11.17 Guarantees, financial commitments and contingencies

1AD.11.17.1 Extract from FRS 102: Sections 1AD.28 to 1AD.34

1AD11.17.2 OmniPro comment

1AD11.17.2.1 Analysis

1AD11.17.2.2 Contingencies (1AD.31 and 1AD.34 of Appendix D of FRS 102)

1AD11.17.2.3 Commitments

1AD11.18 Holding of own shares

1AD11.18.1 Extract form FRS 102; Section 1AD.49

1AD11.18.2 OmniPro Comment

1AD11.19.1 Extract from FRS 102; Sections 1AD.52 – 1AD.53 and 1AD.55

1AD11.19.2 OmniPro Comment 

1AD11.19.2.1 Disclosing legal form, registered office, basis of preparation

1AD11.19.2.2 Disclosure of items included in the balance sheet in more than on line item and not split out in the financial statements or notes

1AD11.20 Other items required by the formats under Companies Act

1AD.11.20.1 OmniPro comment

1AD.11.20.1.1 Analysis

1AD11.20.2 Stocks note

1AD11.20.3 Debtors note

1AD11.20.4 Creditors: amounts falling due within one-year note

1AD11.20.5 Creditors: Amounts falling due after more than one-year note

1AD11.20.6 provision for liabilities

1AD11.20.7 Dividends payable

1A.13 Appendix E

1AE.13.1 Additional disclosures encouraged for small entities

1AE.13.1.1 Extract from FRS102: Section 1AE.1

1AE.13.1.2 OmniPro comment

1AE.13.1.2.1 Overview

1AE.13.1.2.2 Statement of compliance

1AE.13.1.2.3 Transition note

1AE.13.1.2.3.1 Transition note adjustments example

1A11.2.2.1 Transition to FRS 102 – first time exemption – Section 1A

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Quick Guide: Preparing financial statements under Section 1A of FRS 102 and the Small Companies Regime
Overview

Sections 382-384 of the Companies Act 2006 as amended by Statutory Instrument 2015/980 allows companies to prepare financial statements under Section 1A of FRS 102 by applying the requirements of the small companies regime in the Companies Act. This new Small Companies Regime introduced small differences from the previous Small Companies Regime. In addition what differs from what existed previously is that not only had an entity to apply the disclosure requirements of the small companies regime but it also had to the apply the requirements of the financial reporting framework (be that an entity applying FRSSE or FRS 102 in full) which usually went well beyond that of the Companies Act. Section 1A (i.e. the financial reporting framework) mirrors the requirements of the new small companies regime so therefore once the company law requirements are met no further disclosures are required (subject to the caveat the minimum requirements allow the entities financial statements to show a true and fair view).

Which companies can avail of Section 1A/Small Company’s regime?

A company qualifies for the small company’s regime if it fulfils at least two of the three qualifying conditions listed below:

 

Small Co

(note 1)

Holding company for Small Group (note 1 & 2)

Turnover

≤£10.2 million

≤£10.2 million-net

≤£12.2 million-gross

Balance Sheet Total

≤£5.1 million

≤£5.1 million net

≤£6.1 million-gross

Employees

≤50

≤50

Note 1: Exception even where the above thresholds are met:

S.384 of Companies Act 2006 excludes the following companies from applying the SCR and hence Section 1A:

  1. an authorised insurance company; or
  2. a banking company; or
  3. an e-money issuer; or
  4. a MiFID investment firm; or
  5. a UCITS management company; or
  6. an entity that carries on insurance market activity, or
  7. a public company (traded company); or
  8. a holding company of a small group even where the group meets the thresholds where any of the entities in the group come within points 1, 2, 3, 4, 5, 6 and 7 above (this only effects the holding company and not the other companies within the group (other than a company that comes within the remit of points 1-7 above)).

Note 2: In relation to a holding company, a company is a small company if it qualified as small in relation to its last financial year ending on or before the end of the financial year to which the accounts relate.

What is new and common to all entities applying Section 1A for the first time?

Ability to prepare an abridged profit and loss account (start with the gross profit line) and balance sheet as the actual full set of financial statements subject to the approval of all members (see further details in the table below).

When filing the financial statements with the Companies House there is no longer such a thing as abbreviated financial statements. Instead the entity must file the actual set of full financial statements. However there is an option to claim exemption from filing the profit and loss account. Where this exemption is availed of, any profit and loss notes do not need to be included but every other note must be. Where the entity is audited, a note is also required to be included in the notes detailing whether a qualified or unqualified auditors report was issued and if qualified provide specific disclosures as stated in the Act.

New requirement to disclose the average number of employees.

What is new if moving from FRSSE/old UK & Irish GAAP to Section 1A?

Companies will have to apply all the measurement and recognition criteria under FRS 102 Sections 2 to 35 of FRS 102. Section 1A only provides disclosure exemptions. As this is a new accounting framework, there are significant differences between the recognition and measurement criteria under FRS 102 when compared to old GAAP. The differences on transition is beyond the scope of this article.

The disclosure requirements in Section 1A are the minimum required. Directors are still required to consider if additional disclosures are required in order to show a true and fair view (Section 393 CA 2006).

For companies transitioning to FRS 102 for periods beginning before 1 January 2017 and applying Section 1A, there is an ability to claim;

Reduced related party transaction disclosures as discussed below.

On transition to FRS 102 for the first time:

What is new if moving from full FRS 102 to Section 1A?

Provide exemptions from disclosures within each of the 35 Sections of FRS 102. Instead disclosures follow the requirements of Section 1A of FRS 102 which replicate the requirements of the disclosures for small company’s regime in the Companies Act 2006 as amended by Statutory Instrument 2015/980.

The disclosure requirements in Section 1A are the minimum required. Directors are still required to consider if additional disclosures are required in order to show a true and fair view (Section 393 CA 2006).

Reduced related party transaction disclosures as discussed below.

No requirement to prepare a cash flow statement.

What is different when compared to FRSSE/FRS 102 & old Small Companies Regime pre SI 980/2015?

Companies will be able to prepare consolidated financial statements in line with Section 1A; the small company’s regime and Schedule 1 and 6 to the Small Companies Accounts Regulations as amended by Statutory Instrument 2015/980. There are small changes to the Formats as discussed below.

New requirement to disclose the average number of employees.

Significantly reduced disclosures. For example there is no requirement to include:

If transitioning directly from FRSSE, additional disclosures required; examples of additional disclosures are:

Additional items to be included within the accounting policies note (e.g. change in accounting policy; details of prior period errors).

Reduced related party disclosure requirements compared to FRSSE/FRS 102 due to:

As the specific requirement to disclose directors’ remuneration has been deleted judgement will be required when determining whether directors remuneration is required to be disclosed (i.e. judgement in determining if it has been concluded under normal market conditions).

What remains the same if the entity previously applied FRS 102 in full?

Companies will have to apply all the measurement and recognition criteria under FRS 102 Sections 2 to 35 of FRS 102. Section 1A only provides disclosure exemptions.

Companies will be able to prepare Section 1A consolidated financial statements for a small group.

What remains the same if the entity previously applied FRSSE?

No requirement to prepare a cash flow statement.

What are the principal disclosures under Section 1A?

Details

Required

Encouraged in S1A of FRS 102

Directors report – as previously for a company applying the older version of the small companies regime under old GAAP. These requirements being:

–          the names of persons who were directors at any time during the year (S.416 CA 2006)

–          the registered number of the company (S.1068 Registrar rules 2009)

–          Statement of relevant audit information as applicable (S.418(2) CA 2006)

–          Disclosure of the fact the small company exemptions have been availed of (S.419 CA 2006) 

–          Disclosure of political and charitable donations if over £2,000 if applicable (EC Reg 2012)

–          Disclosure of approval of the directors report by at least one director or secretary of the company.

–          Disclosure of fact that a qualifying indemnity provision is in place if applicable (S.236 (1) CA2006)

–          Where at any time during the year shares are held, acquired or disposed the directors report shall state the number and nominal value of shares held and a reconciliation of changes and movements in the period including the amount paid/received. (SI2008/409 5 Sch 6 CA2006)

–          Independent auditors willingness to continue in office or not as applicable (S.489 CA 2006)

–          Payment of creditors – (Disclose if the company or suppliers purport to trade under the terms of the EC (Late Payment in Commercial Transactions) Regulations 2012

–          Signature by one director or secretary confirming approval (S.419 CA 2006)

–          Directors responsibility statement

N/a

Yes by the CA

Yes by the CA

Yes by the CA

Yes by the CA

Yes by the CA

Yes by the CA

Yes by the CA

Yes by the CA

Yes by the CA

Yes by the CA

N/a

Entities that previously applied old GAAP

Auditors report – as previously except now referring to FRS 102 and possibly referring to the statement of changes in equity if the entity chooses to prepare this

Entities that previously applied full FRS 102

Auditors report – as previously except reference to cash flow statement to be deleted and possibly the ‘statement of changes in equity’ if not presented

 

Applicable for both

New requirement to detail, if auditor has not identified any material misstatements in the Directors’ Report in light of the knowledge and understanding of the company and its environment obtained in the course of our audit (S.496 CA 2006)

Yes

S.1A encourages a SOCE to be presented if there are transactions with shareholders

Primary statements

 

 

Profit and loss account/Income statement – laid out in accordance with Schedule 1 Part 1 – Format 1 & 2 (similar to existing Sch 1 Part 1 however the words ‘ordinary activities’ is removed and word ‘charges’ changed to ‘expenses’ – formats 3 and 4 are no longer permitted)

IFRS layout can be utilised

Include movement on profit and loss reserve including details of dividends and transactions with directors if not disclosed in the SOCE (if presented) or in the notes.

Ability to use the abridged profit and loss account layout (i.e. start at the gross profit line (as permitted by Paragraph 1A of Schedule 1 as inserted by SI 980/2015). If used consent of all members required

Yes

No – however if dividend is not at arms length then it must be disclosed

Choice

N/a

Yes – encouraged to present either SOCE or statement of income and retained earnings if transactions with shareholders

Other comprehensive income – Statement of Comprehensive income

Co Law requires details of movement in revaluation reserve, fair value reserve and profit and loss reserves to be disclosed (as discussed below) therefore the presentation of this would meet the requirements.

Yes if movement not presented elsewhere – can be presented in notes

Yes (under Section 1A.9 of FRS 102)

Balance sheet – laid out in accordance with Schedule 1 Part 1 Formats 1 or 2 (similar to existing Schedule 1 Part 1) 

IFRS layout can be utilised

Ability to use the abridged balance sheet option/layout where in the format 1 or 2, the items with numbers in the formats do not have to be shown i.e. split of debtors, creditors etc. (however the disclosures below are required in any event). If adopted the consent of all members is required

•       Requirement to detail the fact that the small companies regime has been followed and this be included above the directors signature (as already required where the small entities exemptions were being complied with).

Yes

Choice

Choice

N/a

Choice

Statement of changes in equity (SOCE) – not specifically required however Companies Act requires:

–          movement on revaluation reserve to be disclosed including details of transfers etc.

–          movement on fair value reserves to be disclosed

–          transactions with shareholders to be disclosed (e.g. dividends paid/payable; shares issued etc.)  

In order to cover off the above requirements it would make sense to include a SOCE

Yes if movement not presented elsewhere.

Yes if not given under normal market conditions

Yes

Yes

Yes

Yes

Notes to the financial statements

 

Disclosure of accounting policies (Schedule 1 Para 4 & S1AC.3-1AC.10) as before (however significantly more than old GAAP/FRSSE) – include within this any true and fair override invoked)

New requirement:

–          to disclose a change in accounting policy, correction of period errors and changes in presentation to be detailed in the accounting policy section (Sch 1 para 2(2)) – include details of the change & the reasons for the change

Yes

N/a

Include a statement of compliance with Section 1A of FRS 102

No

Yes (S1AD.1(a) of FRS 102)

Include a statement that the entity is a public benefit entity if applicable

No

Yes (S1AD.1 FRS 102)

Going concern disclosure with regard to uncertainties

CA requires disclose of the fact that a company is being wound up, if applicable (S.396 CA 2006)

No

Yes

Yes (S1AD.1 FRS 102)

Details of dividend paid/payable/declared

Yes where it is to an individual which is considered a related party and has not been concluded under normal market conditions (Sch 1 (66) SI 409/2008)

Yes (S1AD.1(d) FRS 102 and 1AC.9 FRS 102)

Disclose principal place of business, registered office, legal form and company registration number and disclose the fact that he company is being wound up if that is the case (S.396 CA 2006)

Yes

N/a

Departure from the requirements of Companies Act and FRS 102 to be disclosed (Sch 1(10)(2))-S1AC.10 FRS 102

Yes

N/a

Where transition adjustments arise include a note in line with full FRS 102 (i.e. disclose:

–          equity at date of transition, and end of comparative year under old GAAP reconciling to equity at each period under FRS 102 with notes on the reasons for adjustments; and

–          profit/loss for comparative period as report under old GAAP,  reconciling to profit/loss under FRS 102 with notes on the reasons for adjustments.

No however would be considered necessary to show true and fair view as required under S.393 CA 2006)

Yes (S1Ad.1(e) FRS 102)

The specific requirement for Directors remuneration has been removed. However Schedule 1 (66) and Section 1AC.35 requires all particulars to be disclosed of transactions entered into with the directors which have not been concluded under normal market conditions which would specifically include remuneration paid/payable to directors (this is specifically referred to in Section 1AC.35 of FRS 102).

Judgement will be required here as to whether the remuneration is on an arm’s length basis (i.e. if the remuneration is what would be paid to the directors if someone else who is not a shareholder was to be employed to do the job). Views differ as to what normal market conditions refer to. Therefore if the directors/accountant/auditor believe it is not disclosable, the reasoning for the decision must be kept on file.

Yes however judgement required as to whether they are at an arm’s length basis

N/a

Loans/quasi loans/ given to directors (inc. de facto & shadow) and any guarantees/credit transactions entered into for benefit of directors (Section 413 CA 2006/S1AC.36 FRS 102);

•       Usual disclosures required with regard to movement inc write offs/provisions, terms of arrangements (e.g. interest rates if any, on demand etc.), names of directors, the maximum amount in the year; any costs incurred in fulfilling a guarantee.

Yes

N/a

Other transactions entered into in which director has a material interest which has not been concluded under normal market conditions (Sch 1(66) SI409/2008 & S1AC.35). As before if disclosure applies provide details of the arrangements, the names of the directors, terms of the arrangements, amounts, the nature of the relationship etc.

Yes

N/a

Disclose the amount of interest income recognised on loans to group companies in the P&L (Sch 1(9) P&L Formats note 12 – Small Companies & Group Regulations)

Yes

N/a

Disclose the amount of interest expense recognised on loans from group companies in the P&L (Sch 1(9) P&L Formats note 13 – Small Companies & Group Regulations)

Yes

N/a

Disclosure of average number of employees in year (Section 411(1) CA 2006 as amended by SI980/2015) S1AC.33 FRS 102.

Yes

N/a

Approval by directors on financial statements noting that they show a true and fair view (Section 414 CA 2006).

Yes

N/a

Exceptional item disclosures (Sch 1(61)(2) SI2008/409) – S1AC.32 FRS 102.

Yes

N/a

Disclosure of dividends paid/declared. Encouraged under FRS 102; only required under CA if they are paid under not-normal conditions ((Sch 1(66) SI2008/409) – S1A.35 FRS 102.

No unless at under abnormal market condition

Yes S1AD FRS 102

Investment properties and biological asset movements including disclosure of valuation method and amount recognised in P&L and fair value reserve (Sch 1(51)(2) SI2008/409) – S1AC.22 FRS 102.

Yes

N/a

Accruals for pension liabilities ((Sch 1(57)(3) SI2008/409) – S1AC.29 FRS 102).

Yes

N/a

Particulars of retirement commitment benefits included in the balance sheet and significant assumptions in the valuations (e.g. defined benefit scheme)

Yes

N/a

Impairment/reversal of impairment on financial assets ((Sch 1(48)(3) SI2008/409) – S1AC.13 FRS 102).

Yes

N/a

Prior period errors resulting in change in prior year presentation (Sch 1(2)(2) & (7)(2) SI2008/409) – S1A.7-1AC.10 FRS 102.

Yes

N/a

Change in presentation from the prior year (Sch 1(2)(2) & (7)(2) SI2008/409) – S1AC.7-1AC.10 FRS 102 inc. reasons for change

Yes

N/a

When the reporting entity is controlled by another party, there should be disclosure of the:

–          related party relationship and the name of that party and, if different, that of the ultimate controlling party. If the controlling party or ultimate controlling party of the reporting entity is not known, that fact should be disclosed.

–          registered office address or place of business if unincorporated

–          where consolidated accounts can be obtained from if applicable.

((Sch 1(65) SI2008/409) – S1AC.34 FRS 102)

Yes

N/a

Details of indebtedness ((Sch 1(55)(1) SI2008/409) – S1AC.27 FRS 102.) – disclose:

–          amounts which are repayable after 5 yrs of period end

–          amount in total included in creditors where security is held

–          type and nature of securities held 

Yes

N/a

Detail useful life on development expenditure capitalised and goodwill and the reason for capitalisation and selecting useful life ((Sch 1(21)(2) SI2008/409) – S1AC.4 FRS 102)

Yes

N/a

Disclose impairment/reversal of impairments on all fixed assets ((Sch 1 (19)(3)/(20(2)/(48)(3) SI2008/409) – S1AC.20/ S1AC.21/S1AC.13 FRS 102).

Yes

N/a

Details of guarantees and other financial commitments inc. contingencies ((Sch 1(57)(1)(2) SI2008/409) – S1AC.29/30 FRS 102). Include the nature and form of security provided for these commitments etc. as applicable

For guarantees/commitments entered into for the benefit of subsidiaries, parent or fellow group companies disclose this separately from all other guarantees/commitments (S1AC.29 FRS 102).

For guarantees/commitments entered into for the benefit of entities where a participating interest is held disclose this separately from all other guarantees/commitments (S1AC.29 FRS 102).

Examples include disclosure of commitment in total under non-cancellable operating leases (no need to split out) and total amounts payable under finance leases where security is held(no need to split out).

Yes

N/a

Details of events after year end ((Sch 1(64) SI2008/409) – S1AC.29/30 FRS 102)

Yes

N/a

Related party transactions ((Sch 1(66) SI2008/409) – S1AC.35 FRS 102).-Note disclosures less than what is required currently. Disclose:

–          transactions to extent entered into with the below parties under terms which is not under normal market conditions  with the exception of transactions with 100% owned companies:

–             holders of associate interest or more in Company.; and

–             Companies etc. in which Co. holds participating interest      or more; and

–             Directors of the company or of a holding company of that company

Note this includes directors remuneration and payments of dividends to members. This has been discussed further above.

Disclose the amount of such transactions, the nature of the relationship & other relevant information.

Yes

N/a

Movement in revaluation reserve and fair value reserve to be shown in tabular form

Yes

N/a

All notes for items included in fixed asset section of balance sheet where held at cost/revalued amount – (including investment property, fixed asset investments, intangibles, heritage and biological assets) incorporating details of movement (i.e. additions, disposals, transfers, depreciation, impairments, revaluations, fair value adjustments etc.) on same for year ((Sch 1(48) SI2008/409) – S1AC.12 FRS 102).

Yes

N/a

For fixed assets detailing impairments netted against cost where assets held at cost less impairment ((Sch 1(48) SI2008/409) – S1AC.13 FRS 102)

Yes

N/a

Where fixed assets revaluation policy is in place((Sch 1(34)/(49)/(54)/(35) SI2008/409) – S1AC.15-18 FRS 102):

–          provide basis of valuation.

–          the year the asset was revalued

–          if revalued in year the name of person that valued it and that persons qualification.

–          movements in and out of revaluation reserve including tax effect – ideally shown in tabular form;

–          state NBV if it was carried at historical cost splitting out cost and accumulated depreciation/amortisation

(this is also applicable for assets held at fair value with movement through P&L with the exception of the revaluation reserve movements requirements i.e. investment property etc.)

Yes

N/a

Any interest costs capitalised must be disclosed in a note ((Sch 1(27)(3) SI2008/409) – S1AC.19 FRS 102)

For financial instruments measured under Section 11 and 12 disclose for each instrument ((Sch 1(51)(2)(c)(3)/(52) SI2008/409) – S1AC.22-1AC.25 FRS 102):

–          Significant assumptions underlying valuation models and techniques where fair value determined otherwise than by the market price in an active market

–          The fair value movement recognised in the financial statements

–          The amount credit or debited to a fair value reserve and the balance at beginning and end of year on this reserve

–          The tax impact recognised in fair value reserve

–          For derivative financial instruments (e.g. foreign exchange contracts, interest swaps) detail:

1.       extent and nature of the instruments including significant terms and conditions that affect amount,

2.       timing and certainty of cash flows

Yes

N/a

Disclose of auditors remuneration for the audit of the financial statements only if applicable (S.414 CA 2006)

Yes

N/a

Disclose off balance sheet arrangements e.g. debt factoring; consignment stock, take and pay arrangements etc. ((Sec 410A – S1AC.31 FRS 102).

Yes

N/a

Include note disclosing the fact the ES PASE was applied if that is the case

ES PASE

N/a

Disclose movement on fair value of investments in associates, subsidiaries or joint ventures where held at fair value and movement posted to P&L. Fair value movement to be split by amount attributable to movement on credit risk

((Sch 1(36)(4) SI2008/409) – S1AC.26 FRS 102)

Yes

N/a

Any other disclosures required in order to allow the financial statements to show a true and fair view – S.393 CA 2006.

Yes

N/a

 

What do accountants need to do?

Review their client listing to assess which companies can apply Section 1A of FRS 102.

Advise clients of the additional choices available with regard to accounting standards (Section 1A FRS 102/full FRS 102) and the benefits this will provide with regard to the reduced disclosure requirements.

Advise the directors of the decisions that will be required to be made by them in assessing whether additional disclosures are required on top of the Company law requirements in order to show a true and fair view.

Advise companies who are transitioning to FRS 102 for the first time of the exemptions available in Section 35.10(u)(v) if Section 1A is applied.

No concept of abbreviated financial statements for filing financial statements with the Companies House. Instead full accounts are filed with the option not to file the profit and loss account and the related profit and loss notes. Advise clients of the possibility of additional notes being visible to the public as a result.

Advise clients of the abridgement option when preparing full financial statements.

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Examples

Example 1: Prior period error 

Example 2: Statement of compliance with FRS 102

Example 3: Transition note adjustment 

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Downloads

Download “Section 1A Detailed Guide”

Section-1A-Scope-of-FRS-102-Detailed-Guide-UK.pdf – Downloaded 75 times – 1.41 MB

Website Links

Section 1A Small Entities

Appendix A to Section 1A – Guidance on Adapting Balance Sheet Formats

Appendix B to Section 1A – Guidance on Adapting the Profit and Loss Format

Appendix C to Section 1A – Minimum Disclosure Requirements for Small Entities

Appendix D to Section 1A – Additional Disclosures Encouraged for Small Entities

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Downloads 

Download “FRSSE to FRS102 S1.A - Simple Case Study”

80.07.03-FRSSE-to-FRS102-S1.A-Simple-Case-Study.pdf – Downloaded 41 times – 2.64 MB

Download “FRSSE to FRS 102 S1A Case Study”

80.07.04FRSSE-to-FRS-102-S1A-Case-Study.pdf – Downloaded 37 times – 1.98 MB

Download “Complex Transition from FRSSE old GAAP - S1A FRS 102”

80.07.07-Complex-Transition-from-FRSSE-old-GAAP-S1A-FRS-102.pdf – Downloaded 43 times – 3.66 MB

Download “Simple Transition from FRSSE old GAAP - S1A FRS 102”

80.07.08-Simple-Transation-from-FRSSE-old-GAAP-S1A-FRS102.pdf – Downloaded 37 times – 2.22 MB

Download “Transition Case Study - Full FRS 102 (not applying small companies regime) to Section 1A”

80.07.11-Transition-Case-Study-from-Full%20FRS-102-to-S1A.pdf – Downloaded 27 times – 800.93 KB

 

 

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Downloads

Download “FRS 102 and Companies Act 2006 Detailed Disclosures Checklist for Small Companies applying the Small Companies Regime”

75.06.08-FRS-102-and-Companies-Act-2006-Detailed-Disclosures-Checklist-for-Small-Companies-applying-the-Small-Companies-Regime.pdf – Downloaded 76 times – 477.02 KB

 

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Section 1A – Financial Statements

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