Now there's a point!

Here's some interesting facts about the legal requirements for micro-entity accounts.

Well, we find them interesting anyway!

Here they are in no particular order:

1. The Small Companies (Micro-Entities’ Accounts) Regulations 2013 (the ‘micro-entity

regulations’) became effective for financial years ending on or after 30 September 2013; introducing a simpler reporting regime for a new sub-category of small company: the micro entity!

2. There are two formats for the balance sheet which you can choose from but just the one format for the profit and loss account.

3. A micro-entity is not required to prepare a directors’ report.

4. There is a requirement to include 'minimum accounting items (see our other article on these).

5. Line items within the profit and loss account cannot be combined or renamed.

6. If a micro-entity chooses to disclose information in addition to the minimum accounting items it must, in respect of that item, follow the disclosure requirements of the relevant accounting standard.

7. The fair value accounting and alternative accounting rules cannot be applied in micro-entity accounts. This means that no revaluations or subsequent measurements at fair value are permitted under the micro-entities regime. For example, a micro-entity with an investment property, choosing to adopt the micro-entities regime, would be required to measure the property at cost and not fair value.

8. Accounts prepared in accordance with the micro-entity regulations are presumed by law to give a true and fair view, rather than explicitly including in the Accounts themselves.

9. Only the balance sheet, including the information disclosed at the foot, needs to be filed at Companies House. It is not necessary to file the profit and loss account.

10. No accounting policy options are available.

11. Borrowing costs and development costs must be expensed to the profit and loss account in the period in which they are incurred, and government grants must be recognised on the accruals basis.

12. No accounting for deferred tax or equity-settled share-based payments prior to the issue of the Shares.

And finally...

13. Further simplifications have been made to the recognition and measurement requirements, including the accounting for post-employment benefit plans, financial instruments, and foreign currency transactions.