Financial Reporting Standard for Smaller Entities (FRSSE)

On 31 July 2013 the FRC issued an updated version of the Financial Reporting Standard for Smaller Entities.

FRSSE (effective January 2015) (PDF)

FRS 100 Application of Financial Reporting Requirements, issued in November 2012, contained a small number of amendments to the FRSSE. As a convenience to those preparing small company accounts, the FRC has issued an updated version of the FRSSE containing those amendments, to maintain it as a one-stop-shop. The updated FRSSE contains no new amendments to those previously issued.

The amendments to the FRSSE are as a consequence of the revised reporting framework introduced into the UK and Republic of Ireland, with the issue of FRS 100 and FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland. As part of the revised reporting framework, the FRC has withdrawn extant financial reporting standards and Urgent Issues Task Force (UITF) abstracts and has made amendments to the FRSSE where it previously referred to standards or abstracts that are now withdrawn.

The FRSSE (effective January 2015) will supersede the FRSSE (effective April 2008) and will be effective for reporting periods beginning on or after 1 January 2015, although early adoption is permitted.

The April 2014 amendments to the FRSSE (effective April 2008) and the FRSSE (effective January 2015) to incorporate the micro-entities regime included the requirement for micro-entities to account for investment properties using historical cost, in accordance with the legal framework for micro-entities.  However, paragraph 1.2 of the FRSSE (effective April 2008) and the FRSSE (effective January 2015) may appear unclear in relation to the application of depreciation and impairment as part of the cost method.

Paragraph 1.2 of the FRSSE (effective April 2008) and of the FRSSE (effective January 2015) is amended as follows (deleted text is struck through, inserted text is underlined):

1.2     A micro-entity preparing its financial statements in accordance with section 393(1A) of the Act:

(d)     shall account for any investment properties at cost less depreciation and impairment in accordance with paragraphs 6.19 to 6.22, paragraphs 6.38 to 6.42 and paragraphs 6.45 to 6.46 and 6.48 rather than paragraphs 6.18, 6.37, 6.44 and 6.50 to 6.53;

It has been brought to our attention that, in referring to the small companies regime, the footnote to paragraph 2.6 and paragraph 2.30 of the FRSSE (effective April 2008) are not consistent with the wording of the Companies Act 2006 (the Act). The footnote to paragraph 2.6 has been amended as part of the FRSSE (effective January 2015), as set out in FRS 100 Application of Financial Reporting Requirements. For consistency with the Act paragraph 2.30 should be read as follows (deleted text is struck through, inserted text is underlined):

2.30 A COMPANY’S ANNUAL ACCOUNTS MUST BE APPROVED BY THE BOARD OF DIRECTORS AND SIGNED ON BEHALF OF THE BOARD BY A DIRECTOR OF THE COMPANY. THE SIGNATURE MUST BE ON THE COMPANY’S BALANCE SHEET. The date on which the financial statements are approved by the board of directors shall be disclosed in the financial statements. THE BALANCE SHEET MUST CONTAIN, IN A PROMINENT POSITION ABOVE THE SIGNATURE, A STATEMENT THAT THE ACCOUNTS HAVE BEEN PREPARED IN ACCORDANCE WITH THE SPECIAL PROVISIONS APPLICABLE TO SMALL COMPANIES WITHIN PART 15 OF THE COMPANIES ACT 2006 RELATING TO SMALL COMPANIES.

On 29 April 2014 the FRC issued amendments to the FRSSE for use by micro-entities that want to take advantage of new regulations allowing them to prepare simplified financial statements.

 Amendments to the FRSSE - Micro-entities

The ASB published in June 2008 an updated version of the Financial Reporting Standard for Smaller Entities. (FRSSE) to reflect changes in company law arising from the Companies Act 2006. No changes were made to the requirements that are based upon Generally Accepted Accounting Practice.

The updated FRSSE (effective April 2008) applies to accounting periods beginning on or after 6 April 2008; the date from which the accounting and reporting regime for smaller companies in the Companies Act 2006 becomes effective. Early adoption is not permitted; hence smaller companies should continue to use the FRSSE (effective January 2007) for earlier accounting periods.

FRSSE (effective April 2008)