2017 will see big changes to company accounts
Most small companies have always taken the option to place only “abbreviated” accounts on the public record, but 2017 is due to bring some big changes for company reporting.
For periods commencing in 2016, the option to file abbreviated accounts has changed as part of a package of changes which now apply to all companies.
While abbreviated accounts as they are known disappear, small companies will continue to have the option to omit certain information from their filed accounts and therefore public record.
Directors of companies can continue to choose to omit their profit and loss account and all its associated notes, and/or the directors’ report, from its filed accounts. However, the balance sheet is still reported and will now be supported by all its notes.
While notes associated with the profit and loss account can be excluded, notes relating “generally” to the accounts cannot. Examples of this might include the details of the numbers of average employees and related-party transactions, meaning additional information is now publically available.
Companies may instead, with the consent of all members, choose to prepare “abridged” accounts which follow simplified formats as their main accounts, although this does come with additional formalities.
In either case, prior to the removal of the profit and loss account, the accounts prepared by a company must still give a “true and fair view” and so may lead to additional disclosures being required in the accounts on a case by case basis.
We can advise on the detailed effects of these changes and assist directors in choosing the most suitable reporting options for their business.