Explained: filing small and micro-entity accounts

When the new filing regime for small companies first came into effect for accounting periods beginning on or after 1 January 2016, much of the initial attention was on the big headline changes. For example, the removal of the option to file an abbreviated version of the full accounts, and the introduction of a new option for small companies to prepare and file an abridged balance sheet, abridged profit and loss account, or both. Perhaps unsurprisingly, over time the attention has gradually moved towards the more detailed elements of the new regime. This article highlights some of the areas that have so far generated the greatest volume of questions for the Financial Reporting Faculty.  

Micro-entities and filleted accounts

On the surface, the filing rules for a micro-entity are relatively simple – a micro-entity is required to file the same accounts as those prepared for its members. It can choose to not file the profit and loss account, i.e. it need only file its balance sheet, including the information disclosed at the foot of the balance sheet, at Companies House. Such accounts are often referred to as “filleted accounts”.

There has, however, been some confusion over the statements required when a micro-entity chooses not to file its profit and loss account. In this instance, the balance sheet must contain a statement that the accounts have been delivered in accordance with the small companies regime (as there is no separate micro-entity filing regime). This should not be confused with the separate statement required on the balance sheet to explain that the accounts have been prepared in accordance with the provisions available to micro-entities.

This latter statement is required by all entities applying the micro-entities regime and should appear in a prominent position on the balance sheet above the signature. Although a relatively minor point, it is worth bearing in mind as it has tripped some up when filing their micro-entity accounts. 

Audited accounts 

Things can also get slightly complicated when a small or micro-entity is audited. Under the rules, an audited small or micro-entity that chooses to file its profit and loss account, must also file its audit report.

However, an audited small entity that does not file its profit and loss account at Companies House is not required to file its audit report. Instead, the notes to the balance sheet filed must disclose certain details about the audit.

On the other hand, while an audited micro-entity that chooses not to file its profit and loss account is similarly not required to file the audit report at Companies House, unlike an entity in the small companies regime, the micro-entity is not required to include a note to the balance sheet regarding the audit. Therefore, rather surprisingly, there is no indication in the filed micro-entity accounts that they were subject to audit.  

Other matters 

Another area that has generated some considerable debate and uncertainty relates to the statements required in the filed accounts of a small company that chooses not to prepare its accounts in accordance with the small companies regime but still chooses to deliver its accounts to Companies House in accordance with the small companies regime I.e. to file filleted accounts. The faculty is investigating this issue at the time of writing.

Further guidance on the filing requirements for small entities, small LLPs and micro-entities can be found in the faculty’s suite of FAQs at icaew.com/ukgaapfaqs .

Sarah Dunn is a technical manager in ICAEW’s Financial Reporting Faculty. 

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