What is the micro-entity regime?
In 2013 company law introduced a new size of entity called the “micro-entity”, which is essentially a very small company. Micro-entities are allowed to produce and file accounts which contain less detail in terms of disclosure than that required for small entities currently applying the Financial Reporting Standard for Smaller Entities (FRSSE) or UK Generally Accepted Accounting Practice (GAAP).
Why is this something to consider now?
The Financial Reporting Council has consulted on plans to withdraw the FRSSE and bring small entities within the scope of Financial Reporting Standard (FRS) 102. This means that all entities, regardless of size, will be subject to the recognition and measurement principles of FRS 102 which has come into force for accounting periods beginning on or after 1 January 2015. Although small entities will have reduced disclosure requirements, the application of FRS 102 could mean considerable change for those who currently report under the FRSSE. It is therefore an opportune time to consider whether it may be appropriate for eligible companies to report under the micro-entity regime going forward.
For more information about Micro Entities including Frequently Asked Questions and disclosure requirements, download our user guide here.