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As a small business owner(*), did you know that you actually have a choice regarding the information on display for your end-of-year company accounts?

Without going into too much technical jargon, there are two choices:

Choice 1: FRS 105 (micro company) – the most simple set of annual accounts

Choice 2: FRS 102 Section 1A  (small company) – a little bit more detail

The key difference between the two concerns the notes on display in the financial statements. Under FRS 105, the accounts are usually restricted to just simply a balance sheet, a note detailing the average employee numbers throughout the year and details of where the company is incorporated and registered.

Under FRS 102 Section 1A, the accounts will still show a balance sheet, however there will be further notes to show the make up of particular balance sheet items. For example, what makes up “creditors” – trade creditors, bank loans, directors’ loans etc. As you will see, anyone looking at your financial statements would be able to understand a lot more about the business.

Of course, it’s never just as straight forward as picking one of the two options! The choice you make will depend on the individual circumstances of the business owner. For example, a business owner say looking to apply for a mortgage may wish to voluntarily disclose more information under the FRS 102 Section 1A regime, as this offers lenders more information. However most business owners will want to disclose as little as possible, and that’s perfectly fine – we would suggest the FRS 105 regime in this case.

If you are unsure what regime your accounts are prepared under, or would actually like a little advice on what regime suits your business best then feel free to reach out to one of the Vibrant team.


A small company must satisfy at least two out of the following three criteria:

• Turnover of less than £632,000

• A balance sheet total of less than £316,000

• Average employee numbers of less than 10

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