Out with the old, in with the new

September is a busy period for accountants, with the filing of company accounts with a December year-end date due at the end of the month. Despite the relief that many feel now that this date has passed, there is also a sense of sadness as a number of the smaller companies would have been using the FRSSE for the very last time.

Due to recent changes, all accounting periods beginning on 1 January 2016 must use the new financial reporting framework. There is a choice for the SMEs to use FRS 102 or FRS 105. The new framework relies heavily on the accountant’s judgment and largely on the users of the financial statements.

FRS 102 offers reduced disclosures in small company accounts, also known as Section 1A FRS 102. There are 13 compulsory notes to the accounts. FRS 105 is for micro-entities. The accounts consist of the balance sheet and profit and loss only. There are no accounting policies, deferred tax and revaluation. Accountants will need to provide some guidance to the directors when they consider if their financial statements show a true and fair view.

So how does this impact on your balance sheet and your bottom line? If you are a business owner or finance director, you might need to speak to your accountant to see if these changes will affect you. The directors at WSM are happy to discuss this further with you.

For those accountants who are seeking more guidance on FRS 102, South West London Area Society is running a workshop with Bill Telford on Wednesday 23 November from 7PM at Wimbledon Park Golf Club at the Clubhouse. Please contact Annie Lee for further details.