FRS105 – The new Financial Reporting Standard for Small Entities (in draft)

The Financial Reporting Council (FRC) has recently published FRED 58, being the Exposure Draft for FRS105, which in turn will become the new FRSSE (or replace the existing FRSSE, we believe).

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Comments on the Exposure Draft was due by 30 April 2015, so if you missed it, we are afraid the the train has already left the station.

In a nutshell, we have some serious conceptual and philosophical concerns the FRED 58 does not address (and staff at the FRC at a recent event in London, prior to the General Election, could not provide assurances on).

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Effectively FRS 105 (as it will be know), once it is ratified and adopted in parliament, will not be IFRS ‘Lite-lite‘, although it will have some of the overall principles of Fair Value Accounting contained within it.

At a fundamental level micro-entities (* as defined below) can choose to adopt either FRS 105 or FRS 102.  However, be very careful in which one you choose, as the two standards have some fundamental differences contained within them, which, later down the line (as the proverbial can is kicked up the road), might cost you additional compliance fees and time and effort, if you need to convert from FRS 105 reporting to FRS 102 (New UK GAAP).

Our concern is this:

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“The overall objective of all the initiatives (driven from Brussels) is HARMONISATION.  The differences in approach between FRS 105 and FRS 102 do not underscore this fundamental principle!”

Hence, our health warning:  Think and consult carefully, before adopting either standard (FRS 102 or FRS 105) if you are a micro-entity caught in the compliance reporting net.

If you have any questions or concerns, please contact us for more details.

©2015 – Rohan Badenhorst

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*Definition of a micro-entity:

Micro-entities – HMRC guidance – May 2015

Micro-entities are very small companies. Your company will be a micro-entity if it has any 2 of the following:

  • a turnover of £632,000 or less
  • £316,000 or less on its balance sheet
  • 10 employees or less

If your company is a micro-entity, you can:

  • prepare simpler accounts that meet statutory minimum requirements
  • send only your balance sheet with less information to Companies House
  • benefit from the same exemptions available to small companies

Filing CIC (Community Interest Company) Annual Accounts

If you have not yet filed Annual Accounts for a CIC (Community Interest Company), then please be aware that the process and procedures for filing the Annual Accounts at Companies House is different from normal electronic filings.

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 Firstly you cannot file electronic Annual Accounts.

Guidance is published here at the Companies House web site.

In order to file the Annual Accounts you will need to prepare a form CIC 34 which can be downloaded from the link.

The completed and signed (by a director or company secretary) CIC 34 form, together with a printed copy of the Annual Accounts and a £15 filing fee must be sent to Companies House well in advance of the filing deadline.  This is to avoid any late filing penalties, should Companies House reject the initial filing and you need to make any amendments that might be necessary in order to re-file the Annual Accounts.

Companies House officials were not yet able (during April 2015) to provide us with information as to when the electronic filing of CIC Annual Accounts will be possible.

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Hence, just like filing Limited Liability Partnership Annual Accounts, the traditional hard copy and postage paid (preferably recorded delivery) or handing in the documents at a Companies House official Contact Centre office location, is still the only way to get the Annual Accounts filing compliance check done, for the time being.

©3resource – 2015

No real ‘SAFE-Harbour’ rules exist? Do they?

Following the revelations on 12 March 2015 on the Radio 4 Today programme by Hazel Blears of the UK Intelligence and Security Committee of Parliament, our question today is this simple one:
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A candidate icon for Portal:Computer security (Photo credit: Wikipedia)

 “Does any Information Security Safe-Harbour rule actually in practice exist?

 

We might just as well tear up or bin all existing IT security Safe-Harbour rules and regulations that CLOUD-technologies companies having been trying to establish and promote as part of creating frameworks to assure customers that their data is security, will be treated with integrity and will be for their(customers) own eyes only.
Here is a link to an example of what safe-harbour rules are in the EU:
Here are some legal interpretations of safe-harbour rules:
 The only realistic option left for any user of the internet is this:
“Use your own common sense, think, check, re-read that electronic data information package, before you press the send button”