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Section 6 – Notes to the Financial Statements
Section 6 details the notes which are required to be disclosed in the financial statements. It applies to all entities that are eligible as a micro entity and that choose to apply the micro companies/entities regime.
Extract from FRS 105 – Section 6.1
6.1 This section sets out the information that shall be disclosed in the notes to the financial statements and where. A micro-entity is permitted, but not required, to disclose information additional to that required by this section. Paragraph 1.3 applies to any additional information disclosed.
OmniPro comment
The micro entity can if it so wishes include additional notes however if it decides to include further information it must apply the disclosure guidance in Section 1A of FRS 102 which is confirmed in Section 1.3 of FRS 105. Where additional information is being proposed to be included in the notes please go to Section 1A of FRS 102 within the website.
Structure and content of the notes
Extract from FRS 105 – Section 6.2-6.3
6.2 In accordance with section 472(1A) of the Act, the notes to the financial statements of a micro-entity shall be presented at the foot of the statement of financial position and shall include the following information:
(a) advances, credit and guarantees granted to directors as required by section 413 of the Act (see paragraph 6A.1 in the Appendix to this Section); and
(b) financial commitments, guarantees and contingencies as required by regulation 5A of, and paragraph 57 of Part 3 of Schedule 1 to, the Small Companies Regulations (see paragraphs 6A.2 and 6A.3 in the Appendix to this Section).
6.3 In accordance with Regulation 30 of the Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008 (SI 2008/1911), the notes to the financial statements of an LLP which qualifies as a micro-entity shall be presented at the foot of the statement of financial position and shall include financial commitments, guarantees and contingencies as required by paragraph 55 of Part 3 of Schedule 1 to the Small LLPs Regulations (see paragraphs 6A.2 and 6A.3 in the Appendix to this Section).
Appendix to Section 6 – Extract From FRS 105
Company law disclosure requirements
This appendix is an integral part of this FRS.
This appendix sets out the company law disclosure requirements referred to in paragraph 6.2. Other than substituting company law terminology with the equivalent terminology used in this FRS (see Appendix II Table of equivalence for UK Companies Act terminology), the text is as close as possible to that set out in company law.
Where this FRS contains a disclosure requirement related to a company law requirement this has been indicated.
6A.1 Details of advances and credits granted by a micro-entity to its directors and guarantees of any kind entered into by a micro-entity on behalf of its directors must be shown in the notes to the financial statements.
The details required of an advance or credit are:
(a) its amount;
(b) an indication of the interest rate;
(c) its main conditions;
(d) any amounts repaid;
(e) any amounts written off; and
(f) any amounts waived.
There must also be stated in the notes to the financial statements the totals of amounts stated under (a), (d), (e) and (f).
The details required of a guarantee are:
(a) its main terms;
(b) the amount of the maximum liability that may be incurred by a micro-entity;
(c) any amount paid and any liability incurred by a micro-entity for the purpose of fulfilling the guarantee (including any loss incurred by reason of enforcement of the guarantee).
There must also be stated in the notes to the financial statements the totals of amounts stated under (b) and (c). (Section 413 of the Act).
6A.2 The total amount of any financial commitments, guarantees and contingencies that are not included in the statement of financial position must be stated. (Schedule 1, paragraph 57(1) of Schedule 1 to the Small Companies Regulations or paragraph 55(1) of Schedule 1 to the Small LLPs Regulations)
The total amount of any commitments concerning pensions must be separately disclosed. (paragraph 57(3) of Schedule 1 to the Small Companies Regulations or paragraph 55(3) of Schedule 1 to the Small LLPs Regulations)
The total amount of any commitments which are undertaken on behalf of or for the benefit of:
(a) any parent, fellow subsidiary or any subsidiary of a micro-entity; or
(b) any undertaking in which a micro-entity has a participating interest,
must be separately stated and those within (a) must also be stated separately from those within (b). (paragraph 57(4) of Schedule 1 to the Small Companies Regulations or paragraph 55(4) of Schedule 1 to the Small LLPs Regulations)
The following paragraphs in this FRS address these disclosure requirements within the context of specific transactions:
(a) Section 9 Financial Instruments: paragraph 9.28
(b) Section 11 Investments in Joint Ventures: paragraph 11.9
(c) Section 12 Property, Plant and Equipment and Investment Property: paragraph 12.28
(d) Section 13 Intangible Assets other than Goodwill: paragraph 13.17
(e) Section 14 Business Combinations and Goodwill: paragraph 14.3
(f) Section 15 Leases: paragraphs 15.17 and 15.33.
(g) Section 16 Provisions and Contingencies: paragraph 16.19
(h) Section 23 Employee Benefits: paragraph 23.22.
(i) Section 27 Specialised Activities: paragraph 27.5.
6A.3 An indication of the nature and form of any valuable security given by the micro-entity in respect of commitments, guarantees and contingencies within paragraph 6A.2 must be given. (paragraph 57(2) of Schedule 1 to the Small Companies Regulations or paragraph 55(2) of Schedule 1 to the Small LLPs Regulations)
The following paragraphs in this FRS address these disclosure requirements within the context of specific transactions:
(a) Section 9 Financial Instruments: paragraph 9.29.
(b) Section 10 Inventories: paragraph 10.22.
(c) Section 12 Property, Plant and Equipment and Investment Property: paragraph 12.29.
(d) Section 13 Intangible Assets other than Goodwill: paragraph 13.18.
(e) Section 27 Specialised Activities: paragraph 27.6.
OmniPro comment
UK FRS 105 note requirements
The above refers to the UK legislation. The notes are required to be included on the foot of the balance sheet as stated in Section 6.2 of FRS 105. Once a micro entity meets the above requirements no further disclosures are required. However it is possible to include additional disclosures but where this is being considered the disclosures must follow the disclosure requirements for that particular item as stated in Section 1A of FRS 102. See section 1A of FRS 102 for further details.
The disclosure requirements under FRS 105 in the UK are less than what is required under FRS 105 in ROI as can be seen in the ROI section below (e.g. no accounting policies required in UK etc.). Disclosures are effectively the disclosures required under Section 413 of Companies Act 2006 and of paragraph 57 Schedule 1 of the Small Companies and Groups Accounts Regulations.
To summaries the disclosure requirements are:
| Details | Statutory reference |
| Directors report – no requirement to include same but can be included. | S.416 CA 2006 |
| Auditors report (if applicable)– as previously except:
– Delete references to the directors report where exemption claimed – Adjust references in auditors report with regard to matters required to report by exception as only disclosures with regard to loans/quasi loans given to directors or guarantees entered into for the benefit of directors apply. In the paragraph ‘Matters on which we are required to report by the Companies Act 2006’ delete the line ‘In our opinion the information given in the directors’ report is consistent with the financial statements‘ where this is not presented. |
S.496 CA 2006 |
| Profit and Loss Account | |
| Profit and loss Account to be laid out in line with Schedule 1 SI 409/2008 as adjusted by SI 980/2015 (only one format permitted – similar to existing format 2. The wording cannot be changed).
Can be called a ‘profit and loss account’ or ‘income statement’ Details to be included in the profit and loss and the wording are: ‘Turnover; Other income; Cost of materials and consumables; Staff costs; Depreciation and other amounts written off assets; Other expenses; Tax; and Profit or loss
|
Section 5 FRS 105 |
| Balance Sheet | |
| Balance sheet to be laid out in line with Schedule 1 SI 409/2008 as adjusted by SI 980/2015 (2 formats permitted). FRS 105 only requires the following to be shown as a total figure on the balance sheet with no requirement to include the break up in the notes.
– Called up share capital not paid – Fixed assets – Current Assets – Prepayments and accrued income – Creditors: amounts falling due within one year – Creditors: amounts falling due after more than one year – Provisions for liabilities – Accruals and deferred income – Capital and reserves Can be called a ‘balance sheet’ or ‘statement of financial position’ Note the above wording cannot be changed. Notes as detailed below must be included at the foot of the balance sheet. |
Section 4 FRS 105 |
| Notes to the financial statements (note these should be included on the foot of the balance sheet) | S.472(1A) CA 2006/ S,6.2 FRS 105 |
| Loans/quasi loans/ given to directors and any guarantees/credit transactions entered into for benefit of directors (Section 413 CA 2006/S6.2 & 6A.1 FRS 105);
Usual disclosures required with regard to movement inc. write offs/provisions, repayments, terms of arrangements (e.g. interest rates if any, on demand etc.), names of directors, the maximum amount in the year; any costs incurred in fulfilling a guarantee. |
S.413 CA 2006 |
| Disclosure of guarantees entered into for the benefit of the company providing details of:
– the terms of the guarantee; – the maximum liability that may be incurred by the company – the amount paid and any liability incurred by the entity for the purpose of fulfilling the guarantee. |
S.413 CA 2006 |
| Details of guarantees and other financial commitments inc. contingencies that are not recognised in the balance sheet. | Sch 1(57)(1) SI2008/409
S6.2 FRS 105 |
| Details of commitments with regard to pensions must be separately disclosed | Sch 1(57)(3) SI2008/409 |
| Disclosure of presentational currency and level of rounding. Disclosure of name and the period end date at period covered by the financial statements | FRS 105 S3.13 |
| Disclosure of commitments, contingencies, guarantees entered into for the benefit of 1) any parent, fellow subsidiary, subsidiary and 2) any entity where it holds a participating interest must be disclosed separately from other commitments, contingencies, guarantees (also to be shown separately where 1 and 2 exists) | Sch 1(57)(4) SI2008/409 |
| Include note disclosing the fact the ES PASE was applied if that is the case. | ES PASE |
| Approval by directors on financial statements noting that they show a true and fair view. | S.414 CA 2006 |
| Information about off-balance sheet arrangements – If in any reporting period a micro-entity is or has been party to arrangements that are not reflected in its statement of financial position and at the reporting date the risks or benefits arising from those arrangements are material, the nature and business purpose of the arrangements must be given in the notes to the financial statements to the extent necessary for enabling the financial position of the micro-entity to be assessed. | S.410A CA 2006/S.6.2 & 6A.1 of FRS 105 |
| The notes to a micro-entity’s financial statements must disclose the average number of persons employed by the micro-entity in the financial year. | S.410A CA 2006/S.6.2 & 6A.2 of FRS 105 |
| Requirement to detail the fact that the micro companies regime has been followed and this be included above the directors signature (this would be included after the notes to the balance sheet)
‘These financial statements have been prepared in accordance with the micro entity provisions including Financial Reporting Statement 105 ‘The Financial Statement Reporting Standard applicable to the Micro Entities Regime’ and delivered in accordance with the provisions applicable to companies subject to the small companies’ regime. The financial statements were approved by the Board of Directors on (Insert date) and authorised for issue on (insert date). They were signed on its behalf by’ |
S414(3) CA 2006/ S.3.14 FRS 105 |
See below examples of the required disclosures;
Example 1: Sample UK FRS 105 financial statements disclosures
1. Company Details
The company’s’ registered office is Construction Place, Builders Lane, Dunblock, Any City. United Kingdom. The company is a limited liability company incorporated in the United Kingdom and its company registration number is XXX[1].[2]
The Financial Statements are prepared on the going concern basis[3] .
2. Employees
The average number of employees employed by the company in the year was X (20X7: X)[4] :
3. Directors benefits; advances/loans, credits and guarantees
Details of loans entered into for the benefit of the directors are[5]:
| Mr. A Director | Mr. B Director | |
| Opening balance | 14,000 | 18,000 |
| Advances to directors | (4,000) | (14,600) |
| Written off in period | (XXXX) | (XXXX) |
| Provided for | (XXXX) | (XXXX) |
| Repayments from directors | 10,000 | 10,600 |
| Closing balance | 20,000 | 14,000 |
The interest rate applied to these loans was 5% per annum on a compound interest basis and is repayable on XXX. The loan is unsecured.
During the year, the Company provided a guarantee to ABC Bank to guarantee a £STG10,000 loan entered into by Mr A, personally. The guarantee can be called on in the event of default by Mr A. There were no costs incurred in providing this guarantee nor was this guarantee called in during the period.
4. Guarantees, contingencies and other financial commitments[6]
a) The company has pledged the building that it owns as well as providing a fixed and floating charge over all the assets of the company as security on loans taken out with the bank. The total value of these loans on the balance sheet at year end for which security is held was £XXX (2015:£XXX) [7].
b) The company had capital commitments of £XX at the year ended 31 December 2016 (2015:£nil) in relation to the construction of its new property (2015:£Nil). This commitment is secured by a fixed and floating charge over the company’s assets.
c) An amount of £1,000 (2015: £500) was included in accruals with regard to pension contributions withheld which is due for payment after year end to the defined contribution scheme. A further £XX was included in accruals for future payments required to fund a deficit which the company has committed to.
d) At 31 December 2016, the company had commitments under non-cancellable operating leases totalling £XXX (£XXX).
e) A legal action is pending against the company for alleged unfair dismissal. The directors under advisement from their legal team expect that the claim will be successfully defended. Should the company be unsuccessful in the action the maximum estimated settlement is not expected to exceed £10,000. It is not anticipated that any material liabilities will arise from the contingent liabilities other than those provided for.
f) Included in creditors is an amount of £XXXX (2015: £XXX) which relates to amounts payable on finance leases entered into which are secured on the related assets to which the financial lease relates.
g) The company has entered into a guarantee for the benefit of its subsidiary/holding company/sister company. The total amount of this guarantee was £XX [8].
h) The company has entered into a guarantee for the benefit of an entity in which the company holds a participating interest. The total amount of this guarantee was £XX [9].
i) A legal action is pending against the company for alleged unfair dismissal by an employee. The directors under advisement from their legal team expect that the claim will be successfully defended. As a result no provision has been made in the financial statements for a possible settlement on the basis that the employee is unlikely to succeed.
j) At the year end, the company had forward foreign exchange contrasts in place totalling £2,000 (2015: £nil) for the sale of British pounds.
k) A dividend of £XX was declared after year end in relation to the current year.
Include below if audit exemption claimed
We, as director(s) of (company name), state that:
(a) the company is availing itself of the exemption provided for in Section 477 of the Companies Act 2006,
(b) no notice under Section 476 of the Companies Act 2006 has been served on the company, and
(c) we acknowledge the company’s obligations under the Companies Act 2006, to keep adequate accounting records and prepare Financial Statements which give a true and fair view of the assets, liabilities and financial position of the company at the end of its financial year and of its profit or loss for such a year and to otherwise comply with the provisions of Companies Act 2006 relating to Financial Statements so far as they are applicable to the company.
Include the below above the sign off of the financial statements and after the above notes.
These financial statements have been prepared in accordance with the micro entity provisions including Financial Reporting Statement 105 ‘The Financial Statement Reporting Standard applicable to the Micro Entities Regime’ and delivered in accordance with the provisions applicable to companies subject to the small companies’ regime. The financial statements were approved by the Board of Directors on (Insert date) and authorised for issue on (insert date). They were signed on its behalf by [10]
Mr A Director
Director
Date:
OmniPro comment
ROI FRS 105 note requirements
The notes are required to be included after the balance sheet as stated in Section 6.4 and Appendix B of Section 6 of FRS 105. Once a micro entity meets the micro companies regime disclosure requirements as stated in Company Law no further disclosures are required. However it is possible to include additional disclosures but where this is being considered the disclosures must follow the disclosure requirements for that particular item as stated in Section 1A of FRS 102. See section 1A of FRS 102 for further details.
The disclosure requirements under the Micro Companies Regime in the Republic of Ireland as stated in the Companies Act 2014 have not been included in the current version of FRS 105. This will be updated in due course.
A summary of the disclosure requirements are detailed below (also see the detailed Micro entities disclosure checklist in the disclosures checklist section of the website):
What are the maximum disclosures under FRS 105?
| Details | Statutory reference |
| Directors report – no requirement to include same but can be included. | S.325 CA
2014 |
| Auditors report – as previously except (under auditing standards for periods beginning before 15 June 2016):
− Delete references to the directors report where exemption claimed In the paragraph ‘Matters on which we are required to report by the Companies Act 2014’ delete; − the line ‘In our opinion the information given in the directors’ report is consistent with the financial statements‘ where this is not presented. − the disclosures of directors’ remuneration and transactions specified by sections 305 to 312 of the Act are not made; and the directors were not entitled to prepare the financial statements in accordance with the micro companies regime and take advantage of the exemption from disclosing certain information required by sections 305 to 312 Insert statement in new paragraph ‘Other Matters’ under paragraph ‘Matters on which we are required to report by exception’: – ‘The financial statements have been prepared on the basis that as per Section 336(3A) of the Companies Act 2014 the company qualifies for the micro companies regime, it complies with the minimum requirements of this Act (within the meaning of Section 324(11)) in relation to its financial statements and therefore is presumed to give a true and fair view as required by subsection (3)’. Auditors report – (under new IAASA auditing standards for periods beginning on or after 15 June 2016): Basic Structure of Audit Report – (New Revised Format For Clean Opinion) – Opinion (now presented at start of report) – Basis for opinion – Conclusions relating to going concern – Opinions on other matters prescribed by the Companies Act 2014 – Matters on which we are required to report by exception – Responsibilities of directors for the financial statements – Auditor’s responsibilities for the audit of the financial statements – The purpose of our audit work and to whom we owe our responsibilities In the paragraph ‘Matters on which we are required to report by the Companies Act 2014’ delete; − the line ‘In our opinion the information given in the directors’ report is consistent with the financial statements‘ where this is not presented. − the disclosures of directors’ remuneration and transactions specified by sections 305 to 312 of the Act are not made; and the directors were not entitled to prepare the financial statements in accordance with the micro companies regime and take advantage of the exemption from disclosing certain information required by sections 305 to 312 Insert statement in new paragraph ‘Other Matters’ under paragraph ‘Matters on which we are required to report by exception’: – ‘The financial statements have been prepared on the basis that as per Section 336(3A) of the Companies Act 2014 the company qualifies for the micro companies regime, it complies with the minimum requirements of this Act (within the meaning of Section 324(11)) in relation to its financial statements and therefore is presumed to give a true and fair view as required by subsection (3)’. |
S.336 & S.337 CA 2014
S.336 & S.337 CA 2014 / ISA700, ISA701, ISA705, ISA706, ISA570
|
| Profit and loss account | |
| Must be presented in a format as permitted by Companies Act 2014 – Schedule 3B – Format 1: i.e.: Turnover; Other income; Cost of materials and consumables; Staff costs; Value adjustments and other amounts written off assets; Other expenses; Tax; Profit or loss | Formats Sch 3B CA 2014 |
| The balance sheet
|
|
| Must be presented in a format as permitted by Companies Act 2014 – Schedule 3B – Format 1 or 2 – Total figures no need for notes to show split; Called up share capital not paid; Fixed assets; Current assets; Prepayments and accrued income; Creditors: amounts falling due within one year; Net current assets (liabilities); Total assets less current liabilities; Creditors: amounts falling due after more than one year; Provisions for liability; Accruals and deferred income; Capital and reserves | Formats Sch 3B CA 2014 |
| Statement to be included above the approval of the financial statements of the balance sheet disclosing the fact that the accounts are prepared in accordance with the micro companies regime and FRS 105. | S3.14 FRS / S.324 CA 2014 |
| Approval by directors on financial statements noting that they show a true
and fair view. |
S.324 CA
2014 |
| Notes to the financial statements | |
| Disclosure of accounting policies. New requirement to
− disclose a change in accounting policy in the accounting policy section detailing the reason for the change for it and the impact of the change on the current and prior years. |
S.321 CA 2014 |
| Going concern disclosure (and basis if not prepared on a going concern). | Sch 3B(12) CA 2014 |
| Details of dividend paid/payable/declared split by amount included in
accruals at the period end. |
Sch 3B(33)
CA 2014 |
| Departure from the requirements of Companies Act and FRS 105 to be disclosed | Sch 3B(19)) CA 2014 |
| Loans/quasi loans/ given to directors (inc. de facto & shadow) and any guarantees/credit transactions entered into for benefit of directors (Section 307-308);
• No need to disclose max amount O/s in year – instead disclose amount written off • Usual disclosures required with regard to balance at start and end of each year, movement, terms of arrangements, interest rate, names of directors, % of loan to net assets, repayments, and advances in the year etc. For guarantees; details of the arrangement entered into including value, an indication of the interest rate and any other relevant conditions Exemption from disclosure if the arrangements did not exceed €7,500 for any director or a connected party in the year. |
S.308-308 CA 2014 |
| Disclosure of holding of own shares or shares in holding company – detailing amount and nominal value by class and amount of profits restricted as a result to include the % of shares held to total shares in issue.
Investment in holding company shares should be disclosed in equity in the balance sheet as a deduction from capital and reserves. |
S.320 CA 2014 |
| Where an asset or liability relates to more than one of the items listed in either of the balance sheet formats, then its relationship to other items shall be disclosed under the item where it is shown or in the notes to the financial statements. For example finance leases may be shown within the line ‘creditors within one year’ and ‘creditors greater than one year’ so as a result disclosure of this fact should be made. The same point applies for bank loan, grants etc. | Sch 3A(4)(7) of CA 2014 |
| Acquisition or disposal of own shares disclosures –
– detail movement inc. balance at the beginning and end of each year – including details of shares acquired or held by subsidiary undertakings – number and nominal value of shares held by Co or Sub Co.’s – consideration paid for shares |
S.328 CA 2014 |
| Dividends paid/declared split by amounts included in accruals at period end. | Sch 3B(48) CA 2014 |
| Accruals for pension liabilities. | Sch 3B(35)(5)
CA 2014 |
| Impairment/reversal of impairment on financial assets. | Sch 3B(23) CA 2014 |
| Prior period errors resulting in change in prior year presentation
comparatives including the details of the adjustment and the reasons for it. |
Sch 3B(5) CA 2014 – As required by S.8.16 of FRS 105 |
| Change in presentation from the prior year including the details of the adjustment and the reasons for it. | Sch 3B(5) CA 2014 && S3.6 of FRS 105 |
| Disclose change in accounting estimate, reason for same and impact. | Sch 3B(19) CA 2014 |
| Details of indebtedness – disclose:
− amount in total included in creditors where security is held, − type and nature of securities held. |
Sch 3B(34) CA 2014 |
| Detail useful life on goodwill and the reason for capitalisation and selecting useful life. | Sch 3B(25) CA 2014 |
| Disclose impairment/reversal of impairments on all fixed assets (Sch 3A (23(2). | Sch 3B(23)(2)
CA 2014 |
| Details of guarantees and other financial commitments inc. contingencies. | Sch 3B(35) CA 2014 |
| Movement on profit and loss reserves inc.. transfers in and out to be disclosed if not shown on face of profit and loss account to include details
of prior year adjustments, dividends declared paid and unpaid etc. |
Sch 3B(33) CA 2014 |
| Disclosure of presentational currency and level of rounding. | FRS 105
S3.13 |
| Name, legal form, registered office address, company registration number and if the company is being wound up. | S.291(3)(A) CA 2014 |
| Disclosure of guarantees/commitments/contingencies to be disclosed separately where they are for the benefit of the sub, parent sister companies or companies with which the company has a participating
interest. |
Sch 3B(35)(6) CA 2014 |
| Include note disclosing the fact the ES PASE was applied if that is the case. | ES PASE |
See sample disclosure below illustrating each of the above disclosure requirements:
Example 2: Sample P&L and balance sheet and notes to the financial statements including accounting policies (ROI)
Sample Profit and Loss Account
| 2017[11] | 2016 | |||
| € | € | |||
| Turnover | 500,000 | 650,000 | ||
| Other income | 2,000 | 2,000 | ||
| Cost of raw materials and consumables | (300,000) | (325,000) | ||
| Staff costs | (120,000) | (130,000) | ||
| Value adjustments and other amounts written off assets | (8,000) | (7,000) | ||
| Other expenses | (10,000) | (11,000) | ||
| Tax | (22,000) | (25,000) | ||
| Profit | 42,000 | 154,000 | ||
| Profit and loss reserves brought forward at 1 January [12] | 155,000 | 1,000 | ||
| Dividend declared and paid (for illustrative purposes) [13] | (x) | (x) | ||
| Dividend declared but unpaid at period end included in creditors (for illustrative purposes) | (x) | (x) | ||
| Transfer (to)/from other reserves (for illustrative purposes) | – | – | ||
| Prior year adjustment (see note x) | – | – | ||
| Purchase/redemption of own shares (if applicable) | – | – | ||
| Profit and loss reserve at 31 December | 197,000 | 155,000 | ||
Sample Balance Sheet
| 31-Dec | 31-Dec | 31-Dec | 31-Dec | |||||||||||
| 2017 | 2017 | 2016 | 2016 | |||||||||||
| € | € | € | € | |||||||||||
| Called up share capital not paid | – | – | ||||||||||||
| Fixed assets [14] | 100,000 | 80,000 | ||||||||||||
| 100,000 | 80,000 | |||||||||||||
| Current assets[15] | 165,000 | 100,000 | ||||||||||||
| Prepayments and accrued income | 6,000 | 10,000 | ||||||||||||
| Creditors: amounts falling due within one year[16] | (25,000) | (50,000) | ||||||||||||
| Net current assets | 146,000 | 60,000 | ||||||||||||
| Total assets less current liabilities | 246,000 | 140,000 | ||||||||||||
| Creditors: amounts falling due after more than one year[17] | (10,000) | (20,000) | ||||||||||||
| Provision for liabilities | (4,000) | (5,000) | ||||||||||||
| Accruals and deferred income | (7,000) | (2,000) | ||||||||||||
| 225,000 | 113,000 | |||||||||||||
| Capital and reserves[18] | 225,000 | 113,000 | ||||||||||||
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the micro companies regime and in accordance with Financial Reporting Statement 105 ‘The Financial Statement Reporting Standard applicable to Micro Entities Regime’. The financial statements were approved by the Board of Directors on (Insert date) and authorised for issue on (insert date). They were signed on its behalf by[19]
Mr A Director Ms B Director
Director Director [20]
Date:
Example Notes to the Financial Statements
1. ACCOUNTING POLICIES[21]
The company’s’ registered office is Construction Place, Builders Lane, Dunblock, Any City. The company is a limited liability company incorporated in the Republic of Ireland and its company registration number is XXX[22]
The significant accounting policies adopted by the Company and applied consistently[24] are as follows:
a) Basis of preparation
The Financial Statements are prepared on the going concern basis[25], under the historical cost convention and comply with the financial reporting standards of the Financial Reporting Council [and promulgated by Chartered Accountants Ireland[26]] including ‘The Financial Reporting Standard applicable to the Micro-Entities Regime – ‘FRS 105’, the Companies Act 2014 OR other than where the true and fair view override has been invoked as detailed below.
True and fair view override[27]
The company has adopted the layout in line with XX. This is a departure from the requirements of company law. As a result a true and fair overview has been invoked etc. etc.
(b) Consolidation[28]
The company and its subsidiaries combined meet the size exemption criteria for a group and the company is therefore exempt from the requirement to prepare consolidated financial statements by virtue of meeting the requirements in Section 293(1A) of the Companies Act 2014. Consequently, these financial statements deal with the results of the company as a single entity.
(c) Currency
(i) Functional currency
Items included in the financial statements of the company are measured using the currency of the primary economic environment in which the company operates (“the functional currency”). The financial statements are presented in euro, which is the company’s functional and presentation currency and is denoted by the symbol “€”[29].
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions or the contract rate.
At each period end foreign currency monetary items are translated using the closing rate or the contract rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction.
All foreign exchange gains and losses are presented in the profit and loss account within ‘Other expenses’.
(d) Turnover
Turnover is recognised to the extent that the company obtains the right to consideration in exchange for its performance. Turnover comprises the fair value of consideration received and receivable exclusive of value added tax and after discounts and rebates.
Where the consideration receivable in cash or cash equivalents is deferred, and the arrangement constitutes a financing transaction, the fair value of the consideration is measured as the present value of all future receipts using the imputed rate of interest or the cash price for the goods or services where material and recognised as other income on a straight line basis over the terms of the agreement.
Turnover from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, usually on dispatch of the goods, the amount of turnover can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Turnover from the provision of services is recognised in the accounting period in which the services are rendered and the outcome of the contract can be estimated reliably. The company uses the percentage of completion method based on the actual service performed as a percentage of the total services to be provided.
(e) Interest income
Interest income is recognised on a receivable basis.
(f) Dividend income
Dividend income from subsidiaries is recognised when the Company’s right to receive payment has been established.
(g) Dividend distribution
Dividend distribution to the company’s shareholders is recognised as a liability in the Company’s financial statements in the period in which the dividends are approved by the company’s shareholders.
Dividend distributions to holders of shares classified as liabilities is recognised as a liability in the Company’s financial statements as they become due with the corresponding debit recognised in ‘other expenses’
(h) Government grants
Government grants are recognised at their fair value in profit or loss where there is a reasonable assurance that the grant will be received and the Company has complied with all attached conditions.
Capital Grants are initially recognised as deferred income on the balance sheet and credited to the profit and loss account by instalments on a basis consistent with the depreciation policy of the relevant asset, as adjusted for any impairment.
Revenue Grants are credited to income so as to match them with the expenditure to which they relate. Government grants received are included in ‘other income’ in profit or loss.
(i) Taxation
Current tax is calculated on the profits of the period. Current tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the balance sheet date.
Current taxation assets and liabilities are not discounted.
Deferred tax is not recognised.
(j) Tangible fixed assets including investment property
(i) Cost
Tangible fixed assets including investment properties are recorded at historical cost, less accumulated depreciation and impairment losses. Cost includes prime cost and overheads incurred in financing the construction of tangible fixed assets. In accordance with Section 20 of FRS 105 interest costs are not capitalised.
(ii) Depreciation
Depreciation is provided on tangible fixed assets and investment property, on a straight-line basis, so as to write off their cost less residual amounts over their estimated useful economic lives.
The estimated useful economic lives assigned to tangible fixed assets are as follows:
| Freehold Premises | 2% straight line on cost |
| Motor vehicles | 25% straight line on cost |
| Office Equipment, fixtures & fittings | 12½% straight line on cost |
| Computer equipment | 25%/33⅓% straight line on cost |
| Spare parts | 25% straight line on cost |
| Investment property | 2% straight line cost |
The company’s policy is to review the remaining useful economic lives and residual values of Tangible fixed assets on an on-going basis and to adjust the depreciation charge to reflect the remaining estimated useful economic life and residual value.
Fully depreciated property, plant & equipment are retained in the cost of property, plant & equipment and related accumulated depreciation until they are removed from service. In the case of disposals, assets and related depreciation are removed from the financial statements and the net amount, less proceeds from disposal, is charged or credited to the profit and loss account.
Land is not depreciated
(iii) Impairment
Assets not carried at fair value are also reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. Value in use is defined as the present value of the future pre-tax and interest cash flows obtainable as a result of the asset’s continued use. The pre-tax and interest cash flows are discounted using a pre-tax discount rate that represents the current market risk free rate and the risks inherent in the asset. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).
If the recoverable amount of the asset (or asset’s cash generating unit) is estimated to be lower than the carrying amount, the carrying amount is reduced to its recoverable amount. An impairment loss is recognised in the profit and loss account.
If an impairment loss is subsequently reversed, the carrying amount of the asset (or asset’s cash generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the revised carrying amount does not exceed the carrying amount that would have been determined (net of depreciation) had no impairment loss been recognised in prior periods. A reversal of an impairment loss is recognised in the profit and loss account.
(k) Investments in subsidiary undertakings
Investments in subsidiary undertakings are shown at historical cost less provision for impairments in value.
(l) Leases
(i) Finance leases
Leases in which substantially all the risks and rewards of ownership are transferred by the lessor are classified as finance leases.
Tangible fixed assets acquired under finance leases are capitalised at the lease’s commencement at the lower of the fair value of the leased property and the present value of the minimum lease payments and are depreciated over the shorter of the lease term and their useful lives. The capital element of the lease obligation is recorded as a liability and the interest element of the finance lease rentals is charged to the profit and loss account on an annuity basis based in the interest rate implicit in the lease or the leasee’s incremental interest rate where the implicit rate cannot be determined.
Each lease payment is apportioned between the liability and finance charges using the interest rate implicit in the lease or the leasee’s incremental interest rate where the implicit rate cannot be determined.
(ii) Operating leases
Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss on a straight-line basis over the period of the lease.
(iii) Lease incentives
Incentives received to enter into a finance lease reduce the fair value of the asset and are included in the calculation of present value of future minimum lease payments.
Incentives received to enter into an operating lease are credited to the profit and loss account, to reduce the lease expense, on a straight-line basis over the period of the lease.
(m) Stocks
Stocks comprise consumable items and goods held for resale. Stocks are stated at the lower of cost and net realisable value. Cost is calculated on a first in, first out basis and includes invoice price, import duties and transportation costs. Net realisable value comprises the actual or estimated selling price less all further costs to completion or to be incurred in marketing, selling and distribution.
At the end of each reporting period Stocks are assessed for impairment. If an item of stock is impaired, the identified inventory is reduced to its selling price less costs to complete and sell and an impairment charge is recognised in the profit and loss account. Where a reversal of the impairment is recognised the impairment charge is reversed, up to the original impairment loss, and is recognised as a credit in the profit and loss account.
(n) Trade and other debtors
Trade and other debtors including amounts owed from group companies are recognised initially at transaction price (including transaction costs). For trade debtors where the payment is beyond normal credit terms it is held at the present value of all future payments using the imputed rate of interest or the cash price for the goods or services where material. Where loans are advanced it is carried at the transaction price (including transaction costs where material) regardless of whether a financing arrangement exists. Subsequently all trade and other debtors are measured at transaction price plus transaction costs not yet recognised, plus any unwinding of the discount on transactions initially recognised at present value/cash value, less repayments, plus advances and less any provision for impairment. Transaction costs including any amounts deferred on sales where receipt is deferred beyond normal credit terms are released to the profit and loss on a straight line basis over the length of the contract. A provision for impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision is the difference between the asset’s carrying amount and the estimated future cash flows. All movements in the level of the provision required are recognised in the profit and loss.
(o) Other financial assets
Other financial assets include investments in subsidiaries, associates, joint ventures, listed, ordinary or preference shares. These investments at carried at cost less impairment.
Derivatives are carried at the transaction cost if applicable less impairment and recognised in the profit and loss on a straight line basis over the derivatives life.
(p) Preference share capital
Redeemable preference shares which meet the definition of a liability in Section 17 of FRS 105 have been classified as liabilities in the balance sheet. The preference dividend is charged in arriving at the interest expense in the profit and loss account. (including the following where applicable) However, no dividends will be paid on the cumulative preference shares until the company has positive profit and loss reserves.
(q) Research and development expenditure
Research and development expenses are expensed as incurred
(r) Cash at bank and on hand
Cash and at bank and on hand include cash on hand, demand deposits and other term highly liquid investments regardless of maturity. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet.
(s) Creditors and accruals
Creditors and accruals are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.
Creditors and accruals including amounts owed to group companies are recognised initially at transaction price (including transaction costs). For trade creditors where the payment is beyond normal credit terms it is held at the present value of all future payments using the imputed rate of interest or the cash price for the goods or services where material. Where loans are advanced it is carried at the transaction price (including transactions cost where material) regardless of whether a financing arrangement exists. Subsequently these are measured at transaction price less transaction costs not yet recognised, plus any unwinding of the discount on transactions initially recognised at present value/cash value, less repayments, plus advances. Transaction costs including any amounts deferred on purchases where payment is deferred beyond normal credit terms are released to the profit and loss on a straight line basis over the length of the contract.
(t) Borrowings
Borrowings are recognised initially at the transaction price (including transaction costs). Interest is recognised as per the contract on an accruals basis. Transaction costs are written off to the profit and loss over the life of the loan on straight line basis where material
Borrowings are classified as current liabilities unless the Company has a right to defer settlement of the liability for at least 12 months after the reporting date.
(u) Provisions
Provisions are recognised when the company has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount of the obligation can be estimated reliably.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as a finance cost.
(v) Contingencies
Contingent liabilities, arising as a result of past events, are not recognised when (i) it is not probable that there will be an outflow of resources or that the amount cannot be reliably measured at the reporting date or (ii) when the existence will be confirmed by the occurrence or non-occurrence of uncertain future events not wholly within the company’s control. Contingent liabilities are disclosed in the financial statements unless the probability of an outflow of resources is remote.
Contingent assets are not recognised. Contingent assets are disclosed in the financial statements when an inflow of economic benefits is probable.
(w) Employee Benefits [30]
The company provides a range of benefits to employees, including annual bonus arrangements, paid holiday arrangements and defined contribution pension plans.
(i) Short term benefits
Short term benefits, including holiday pay and other similar non-monetary benefits, are recognised as an expense in the period in which the service is received.
(ii) Annual bonus plans
The company recognises a provision and an expense for bonuses where the company has a legal or constructive obligation as a result of past events and a reliable estimate can be made.
(iii) Defined contribution pension plans
The Company operates a defined contribution plan. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate fund. Under defined contribution plans, the company has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
For defined contribution plans, the company pays contributions to privately administered pension plans on a contractual or voluntary basis. The company has no further payment obligations once the contributions have been paid. The contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.
(x) Dividend distribution
Dividend distribution to equity shareholders are recognised as a liability in the company’s financial statements in the period in which the dividends are approved by the equity shareholders. These amounts are recognised in profit and loss reserves.
(y) Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.
(z) Goodwill
Goodwill represents the excess of consideration paid for the acquisition of trade assets and liabilities over the fair value of the identifiable assets acquired and liabilities assumed. Goodwill is amortised to the profit and loss account on a straight line basis over its estimated useful life. The estimated useful lives of goodwill is X years. Useful life is determined by reference to the period over which the values of the underlying businesses are expected to exceed the values of their identifiable net assets. Where a useful life cannot be determined with reasonable accuracy a default life of 10 years is utilised.
Goodwill is reviewed for impairment if events or changes in circumstances indicate that the carrying value may not be recoverable. Impairments of goodwill are not reversed.
(aa) Other Intangible Assets
Acquired intangible assets are capitalised at cost and are amortised using the straight-line basis over their useful lives up to a maximum of XX years. Where a useful life cannot be determined with reasonable accuracy a default life of 10 years is utilised.
Intangible assets are reviewed for impairment at the end of the first full financial year following acquisition and in other periods if events or changes in circumstances indicate that the carrying value may not be recoverable.
(bb) Biological assets – Forestry
The acquisition of land for forest projects is originally recorded at cost in accordance with Section 12 of FRS 105. Biological assets are measured at the lower of cost and estimated selling price less costs to complete and sell.
Depletion represents the costs of forests clearfelled during the year, calculated as the proportion that the area harvested bears to the total area of similar forests. The depletion amount is charged to the profit and loss account and is based on cost.
(cc) Biological assets
Livestock are measured at the lower of cost and net realisable value. The purchase price of livestock bought in is measured at the purchase price plus directly attributable purchase costs. Own reared stock is measured at cost based on the selling price of the livestock less an appropriate margin based on industry norms to bring the value back to the estimated cost price.
(dd) Prior period adjustment – Change in accounting policy[31]
DISCLOSE CHANGE IN ACCOUNTING POLICY
2. Directors benefits; advances/loans, credits and guarantees
Details of loans entered into for the benefit of the directors are[32]:
| Mr A | Ms B | |
| Director | Director | |
| Opening balance | 14,000 | 18,000 |
| Advances to directors | (4,000) | (14,600) |
| Written off in period | (XXXX) | (XXXX) |
| Provided for | (XXXX) | (XXXX) |
| Repayments from directors | 10,000 | 10,600 |
| Closing Balance | 20,000 | 14,000 |
| Loans as a percent of net assets | X% | X% |
The interest rate applied to these loans was 5% per annum on a compound interest basis and is repayable on XXX. The loan is unsecured.
During the year, the Company provided a guarantee to ABC Bank to guarantee a €10,000 loan entered into by Mr A, personally. The guarantee can be called on in the event of default by Mr A. There were no costs incurred in providing this guarantee.
3. Guarantees, contingencies and other financial commitments[33]
l) The company has pledged the building that it owns as security on loans taken out with the bank. The total value of these loans on the balance sheet at year end for which security is held was €XX (2016:€XX). [34]
m) The company had capital commitments of €30,000 at the year ended 31 December 2017 (2016:€nil) in relation to the purchase of equipment[35]. This commitment has been secured by a fixed and floating charge on the stock.
n) An amount of €XX (2016: €XX) was included in accruals with regard to pension contributions withheld which is due for payment after year end to the defined contribution scheme. A further €XX was included in accruals for future payments required to fund a deficit which the company has committed to.
OR
The company operates a defined benefit scheme. The liability recognised on the balance sheet at year end was €XXX (2016: €XXX) [36].
o) At 31 December 2017, the company had the commitments under non-cancellable operating leases totalling €XXX (2016: €XXXX).
p) The company has entered into a guarantee for the benefit of its subsidiary/holding company/sister company. The total amount of this guarantee was €XX[37].
q) A legal action is pending against the company for alleged unfair dismissal by an employee. The directors under advisement from their legal team expect that the claim will be successfully defended. As a result no provision has been made in the financial statements for a possible settlement on the basis that the employee is unlikely to succeed.
r) At the year end, the company had forward foreign exchange contrasts in place totalling €2,000 (2016: €nil) for the sale of British pounds.
s) Dividends of €XX were declared in the year (2016: €Nil) but were not paid and instead included in accruals at year end[38].
t) Included in creditors is an amount of €XX (2016: €XX) which relates to amounts payable on finance leases entered into which are secured on the related asset to which the finance lease relates. €XXX of this liability is included within creditors: amounts falling due within one year and €XX included within creditors: amounts falling due after more than one year[39].
u) The company entered into a sale and lease back arrangement with the bank and is committed to leasing back the property on an annual basis for £XXX for X years.
v) There is a potential contingent asset/liability in the future in relation to profit commission agreements entered into with various product producers. However in the opinion of the directors it is not practicable to provide an estimate of the financial effect of this contingent asset/liability as it is based on future loss ratios in relation to unsettled claims.
w) It is not anticipated that any material liabilities will arise from the contingent liabilities other than those provided for.
x) The company is currently pursuing a compensation claim due to the losses sustained as a result of restrictions placed on the company’s assets by a competitor. The claim arose as a result of the loss of earnings due to restrictions imposed on the usage of these assets. The company won a case in the High Court and were awarded damages of CUXXXX and costs. The defendants have appealed the matter to the Supreme Court and the company awaits a date for the hearing of the claim. The company’s legal advisors are confident that the award of damages and costs to the company will not be overturned.
y) The following items were included in a number of categories within the balance sheet as detailed below[40]:
| 2017 | 2016 | |
| € | € | |
| Bank loan included within creditors: amounts falling due within one year | XXX | XXX |
| Bank loan included within creditors:
amounts falling due after more than one year |
XXX | XXX |
| Finance leases included within creditors: amounts falling due within one year | XXX | XXX |
| Finance leases included within creditors: amounts falling due after more than one year | XXX | XXX |
| Government grants included within creditors: amounts falling due within one year | XXX | XXX |
| Government grants included within creditors: amounts falling due after more than one year | XXX | XXX |
4. Goodwill amortisation[41]
Goodwill is written off over its useful economic life as it reflects the usage of the assets. OR Goodwill is written off over a period of 10 years which is the default life as the useful life cannot be determined with sufficient reliability.
5. Prior year adjustment – change in classification/presentation/material error etc.[42]
In the prior years the company accounted for etc. etc. This is considered a material error and as a result a prior year adjustment is required.
6. Impairment of financial assets, tangible, intangible fixed assets[43]
An impairment of €XXX (2016: €nil) was recognised in the profit and loss account on financial assets included within the fixed assets section in the balance sheet.
An impairment of €XXX (2016: €nil) was recognised in the profit and loss account on tangible fixed assets included within the fixed assets section in the balance sheet.
A previous impairment of €XXX was reversed to the profit and loss account in the current year (2016:€XX) on financial assets/tangible fixed assets included within the fixed assets section in the balance sheet.
7. Holding of own shares/holding company shares
The company holds the following class of its own shares[44]:
| 2017 | 2017 | 2016 | 2016 | |
| Ordinary shares of €1 each | Number | € | Number | € |
| At 1 January (consideration paid of €XXX) | XXX | XX | XXXX | XX |
| Cancellations | (XX) | (XX) | (XXXXX) | (XX) |
| Redemptions from members | XXXXX | XX | XXXXX | XX |
| Closing balance | XXXXX | XXX | XXXXX | XXX |
| % of own shares held | X% | X% |
The amount of profits available for distribution which are restricted as a result is €XXX (2016:€XX).
The reason for the acquisition/redemption of shares in the year was due to the buyback of shares from its former shareholder and director in order to allow him to retire etc. etc.
The company holds the following class of its parent company shares[45]:
| 2017 | 2016 | |
| A Ordinary shares of €1 each | Number | Number |
| At 1 January | XXX | XXXX |
| Acquisitions | (XX) | (XXXXX) |
| Disposals | XXXXX | XXXXX |
| Closing balance | XXXXX | XXXXX |
The amount of profits available for distribution which are restricted as a result is €XXX (2016:€XX).
6. Movement on profit and loss reserves[46] – INCLUDED FOR ILLUSTRATIVE PURPOSES – MUST BE IN NOTES IF NOT ON FACE OF PROFIT AND LOSS. NOTE REQUIRED IN ABRIDGED ACCOUNTS IN ANY EVENT
| 2017
€ |
2016
€ |
|
| Profit and loss reserves brought forward at 1 January [47] | 155,000 | 1,000 |
| Profit for the financial year | 42,000 | 154,000 |
| Dividend declared and paid (for illustrative purposes) [48] | (x) | (x) |
| Dividend declared but unpaid at period end included in creditors (for illustrative purposes) [49] | (x) | (x) |
| Transfer (to)/from other reserves (for illustrative purposes) | – | – |
| Prior year adjustment (see note x) | – | – |
| Purchase/redemption of own shares (if applicable) | – | – |
| Profit and loss reserve at 31 December | 197,000 | 155,000 |
9. Change in accounting estimate[50]
Detail as required
10. IAASA Ethical Standard – Provisions available for Small entities[51]
In common with many other businesses of our size and nature, we use our auditors to prepare and submit tax returns to the revenue and assist with the preparation of the financial statements.
[1] S. S.391(A1) of CA 2006 & S.3.13A of FRS 105 requires the disclosure of the registered office These also requires disclosure of the legal form, the company registration number.
[2] If the company is a public benefit entity then section 1AD.1(c) appendix D of Section 1A encourages this fact to be disclosed.
[3] Para 12, Sch 3B, CA 2014 – A company is deemed to be carrying on business as going concern. Where the entity has made a decision to wind up the entity that is required to be disclosed, there is no choice- S3.13A of FRS 105/S.396(1A) of CA 2006.
[4] S.411 of CA 2006 requires disclosure of the average number of employees.
[5] S.413 of CA 2006 requires disclosure of balances owed from directors (debit balances)/guarantees given/credit transactions entered into for benefit of directors at any time in the year and their connected parties (see definition of connected parties below). This should detail the:
– name of the person
– value of the arrangement at beginning and end of each year
– advances
– repayments
– provision for bad debts
– an indication of the interest rate
– amounts written off in the year
– terms of the arrangement
– Any other main conditions
For guarantees disclose the terms of the guarantee, the maximum amount of guarantee in the year and any costs incurred in fulfilling that guarantee.
[6] Sch 1(57)(1) SI 2008/409 and S.6.2 FRS 105 requires this disclosure. i.e. disclosures of commitments at year end of any nature including guarantees, contingencies or commitments.
[7] Sch 1(57)(1) SI 2008/409 and S.6.2 FRS 105 requires disclosure of any assets owned where they have been given as security.
[8] Section 6A.2 of FRS 105 & Sch 57(4) of SI 2008/409 requires these type of guarantees to be disclosed separately.
[9] Section 6A.2 of FRS 105 & Sch 57(4) of SI 2008/409 requires these type of guarantees to be disclosed separately.
[10] S.414 CA 2006– A company shall disclose the date when the financial statements were authorised for issue and who gave that authorisation. S.414 (3) CA 2006 & S3.14 of FRS 105 require a statement on the balance sheet stating that the accounts have been prepared under the micro companies regime.
[11] The Micro companies regime requires the above format to be shown – this format cannot be adjusted.
Instead of calling this the profit and loss account it can also be called an income statement
[12] Sch 3B(33) of CA 2014 as amended by CAA 2017 requires the movement on profit and loss reserves to be shown on the face of the P&L or if not shown here in the notes to the financial statements. This has been included here on the assumption that it is not shown in the notes to the financial statements.
Instead of calling this the profit and loss account it can also be called an income statement
[13] Sch 3B(33) requires disclosure of the dividends that were declared and paid in the notes or on the face of the P&L. Also disclosure required separately of dividends declared in the year but unpaid at year end so included in accruals/creditors.
[14] This should include tangible and intangible fixed assets, investment property and financial assets.
[15] This should include bank and cash, stock, trade debtors, other debtors, loans, amounts owed by related companies and taxes receivable.
[16] This should include loans, debentures, trade creditors, amounts owed to group companies, other creditors including taxes etc. etc.
[17] This should include loans, debentures, trade creditors, amounts owed to group companies, other creditors including taxes etc. etc.
[18] Section 3.9 of FRS 105 requires the notes to be included on the foot of the balance sheet. However, based on financial statements prepared by certain Accountancy bodies they are showing the notes separate from the balance sheet and not at the foot of the balance sheet. These pro-forma financial statements have taken the approach to show the notes separate from the balance sheet (and not at the foot of the balance sheet) in order to conform with the Accountancy Bodies interpretation albeit it is not in compliance with Section 3.9 of FRS 105.
[19] S.40 of CAA 2017 amends S.324 to require a statement on the balance sheet stating that the accounts have been prepared under the micro companies regime.
[20] Where there is only 1 director as a new model private LTD that director may approve the financial statements
[21] S.321 of CA 2014 requires an entity to disclose the accounting policies adopted for items included in the balance sheet and P&L
[22] S. S.291-S.295 of CA 2014 requires the disclosure of the registered office These also requires disclosure of the legal form and the principal place of business.
[24] Sch 3B, CA 2014 – Accounting policies shall be applied consistently from one period to another
[25] Para 12, Sch 3B, CA 2014 – A company is deemed to be carrying on business as going concern. Where the entity has made a decision to wind up the entity that is required to be disclosed, there is no choice.
[26] Deemed best practice for firm’s regulated by Chartered Accountants Ireland
[27] Sch 3B(19) requires disclosure of the fact that a true and fair view override was invoked where the requirements of company law has not been followed. The reason for the override should be disclosed and the impact it would have on the P&L and balance sheet if the requirements of company law had been followed.
[28] Applicable to Group companies who do not meet the size criteria to prepare consolidated financial statements
[29] S3.13 of FRS 105 requires disclosure of the presentational currency and any level of rounding
[30] This policy relates to a defined contribution scheme, an expanded policy would be required for a defined benefit scheme
[31] S.321 of CA 2014 as amended by S.37 of CAA 2017 requires details of a change in accounting policy to be included in the accounting policy section of the financial statements detailing the reason for the change for it and the impact of the change on the current and prior years.
[32] S.307 of CA 2014 requires disclosure of balances owed from directors (debit balances)/guarantees given/credit transactions entered into for benefit of directors at any time in the year, shadow director or de factor directors and their connected parties (see definition of connected parties below). This should detail the:
– name of the person
– value of the arrangement at beginning and end of each year
– advances
– repayments
– provision for bad debts
– an indication of the interest rate
– amounts written off in the year
– Any other main conditions
Connected parties are defined by S 220 CA 14 as being connected if they are
- that director’s spouse, civil partner, parent, brother, sister or child;
- a person acting in his or her capacity as the trustee of any trust, the principal beneficiaries of which are that director, the spouse (or civil partner) or any children of that director or any body corporate which that director controls; or
- in partnership with that director.
S.307(8) CA 2014 requires disclosure of the % of net assets the loan represents at the year end and at start of current period
[33] Sch 3B(35) requires this disclosure.
[34] Sch 3B(34) requires disclosure of total amount of debts included in creditors where security is held and the details of the security held.
[35] Sch 3B(35)(2) requires disclosure of commitments at year end of any nature including guarantees, contingencies or commitments.
[36] Sch 3B(35)(5) requires disclosure of retirement benefit commitments recognised on the balance sheet.
[37] Sch 3B(35)(6) requires disclosure of guarantees/commitments/contingencies to be disclosed separately where they are for the benefit of the sub, parent sister companies or companies with which the company has a participating interest.
[38] Sch3B(33)(b) requires this disclosure
[39] Sch 3A(4)(7) of CA 2014 requires where an asset or liability relates to more than one of the items listed in either of the balance sheet formats, then its relationship to other items shall be disclosed under the item where it is shown or in the notes to the financial statements. In this instance for example finance leases have been shown separately under creditors within one year and creditors greater than one year. The same point applies for bank loan, grants etc.
[40] Sch 3A(4)(7) of CA 2014 requires where an asset or liability relates to more than one of the items listed in either of the balance sheet formats, then its relationship to other items shall be disclosed under the item where it is shown or in the notes to the financial statements. In this instance for example finance leases have been shown separately under creditors within one year and creditors greater than one year. The same point applies for bank loan, grants etc.
[41] Sch 3B(25)(4) requires disclosure of the write off period for goodwill and the reason for its selection.
[42] Sch 3B(5) requires disclosure where there has been a change in the prior year comparatives including the details for the adjustment and the reasons for it. Note the P&L and balance sheet should say restated here also. Section 8.10 and 8.16 of FRS 105 requires material errors and change in accounting policies to be applied retrospectively which will adjust the comparative figures and as a result Sch 3B(5) requires the aforementioned disclosures where this arises.
[43] Sch 3B(23) requires disclosure of impairments and reversal of impairments on financial assets, tangible and intangible assets. Note reversal of impairments of goodwill is not permitted so this reversal of same is not applicable.
[44] S.320(4) and S.328 of CA 2014 requires disclosure of the details of owns shares by class held including movement in the year, a disclosure of the restrictions on profits as a result of this and the reason for acquisition of own shares in the year and the % of called up share capital held at beginning and end of each year.
[45] S.320(4) of CA 2014 requires disclosure of the details of shares of its holding company held by class including movement in the year, a disclosure of the restrictions on profits as a result of this and the reason for acquisition of own shares in the year
[46] Sch 3B(33) requires disclosure of change in P&L reserves and any transfers and dividend to show the balance at the start and end of each year. If not shown in P&L then must be disclosed in the notes. Required to be disclosed in abridged financial statements.
[47] Sch 3B of CA 2014 as amended by CAA 2017 requires the movement on profit and loss reserves to be shown on the face of the P&L.
This can also be called an income statement
[48] Sch 3B(33) requires disclosure of the dividend per share and any dividends which were declared and paid in the year to be shown separately from dividend declared but not paid at year end in the notes.
[49] Sch 3B(33) requires disclosure of the dividend per share and any dividends which were declared and paid in the year to be shown separately from dividend declared but not paid at year end in the notes.
[50] Sch 3B(19) requires disclosure change in accounting estimate/measurement basis to be disclosed, the reason for the change, and its effect on the balance sheet and P&L of the company to be stated in a note
[51] Where these provisions have been utilised this fact must be disclosed in the notes to the accounts under the ES PASE rules.
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