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1A.1.1 Extract from FRS102: Section 1A.1-1A.4
1A.2.1 Section 1A – As applicable to the republic of Ireland
1A.2.1.2 Which companies can avail of Section 1A/Small Company’s regime?
1A.2.1.3 What remains the same?
1A.2.2 Section 1A and UK Companies
1A2.3 Choice to apply section 1A of FRS 102
1A.3.1 Extract from FRS102: Section 1A.5-.1A.6
1A.3.2 OmniPro comment – True and fair view
1A.4 Complete set of financial statements of a small entity
1A.4.1 Extract from FRS102: Section 1A.7-1A.11, Section 1AD.1 and Section 1A.16-1A.20
1A.4.2.1 What Section 1 means in practical terms?
1A.4.2.2 The minimum disclosure requirements and the requirements to still show a true and fair view
1A.4.2.3 Disclosure encouraged under S.1A
1A.4.2.4 Formats of Balance Sheet and profit and Loss Account
1A5 Information to be presented in the statement of financial position
1A5.1 Extract from FRS102: Section 1A.12-1A.13
1A6 Information to be presented in the income statement
1A6.1 Extract from FRS102: Section 1A.14-1A.15
1A7 Voluntary preparation of consolidated financial statements
1A7.1 Extract from FRS102: Section 1A.21-1A.22
1A8.1.1 Guidance on adapting the balance sheet formats
1A8.1.1.1 Extract from FRS102: Section 1AA.1
1A8.1.1.2.2 Required formats for entities
1A8.1.1.2.2.2 Format 1 – Balance sheet – set out in legislation – Schedule 3A
1A8.1.1.2.2.3: Format 2 – balance sheet – set out in legislation – Schedule 3A
1A8.1.1.2.2.4 Example – Format 1 – Balance sheet – practical application
1A8.1.1.2.2.5 Notes required to balance sheet
1A8.2.1 Abridged balance sheet
1A8.2.1.1 Extract from FRS102: Section 1AA.2
1A8.3.1.1 Extract from FRS102: Section 1AA.3-1AA.6
1A8.3.1.2.2 Example adapted/IFRS layout – Balance sheet
1A9.1.1 Guidance on adapting the profit and loss account formats
1A9.1.1.1 Extract from FRS102: Section 1AB.1
1A9.1.1.2.2 Application of format 1 profit and loss account set out in legislation
1A9.1.1.2.3 Application of format 2 – profit and loss account set out in legislation
1A9.1.1.2.4 Example format 1 – profit and loss account.
1A9.1.1.2.5 Notes required to profit and loss account at a minimum
1A9.9.1.2.5.1 Consolidated profit and loss note requirements
1A9.2 Abridged Profit and Loss Account
1A9.2.1 Extract from FRS102: Section 1AB.2
1A9.3 Adapted Profit and Loss Account
1A9.3.1 Extract from FRS102: Section 1AB.3-1AB.4
1A9.3.2.2: Example adapted/IFRS layout on the profit and loss accounts
1AC10 Appendix C to Section 1A (Applicable for UK entities)
1AC10.1 Disclosure requirements for small entities
1AC10.1.1 Extract from FRS102: Section 1AC.1-1AC.2
1A10.1.2.2 What entities must comply with Appendix C
1AC10.2.1 Extract from FRS102: Section 1AC.3-1AC.
1AC10.2.2.1.1 Accounting police disclosure
1AC10.2.2.1.1.2 Basis of preparation
1AC10.2.2.1.1.4 Basis of consolidation (if applicable)
1AC10.2.2.1.4.1 Subsidiary undertakings
1AC10.2.2.1.1.4.2 Associates and joint ventures
1AC10.2.2.1.1.5 Business combinations and goodwill [if applicable]
1AC10.2.2.1.1.8 Intangible assets
1AC10.2.2.1.1.9 Contingent acquisition consideration
1AC10.2.2.1.1.10 Financial assets
1AC10.2.2.1.1.11 General turnover accounting policy notes
1AC10.2.2.1.1.11.2 Turnover accounting policy for an insurance broker Turnover – commission income
1AC10.2.2.1.1.11.4 Turnover accounting policy note where turnover is derived from investments
1AC.10.2.2.1.1.11.5 Turnover accounting policy for a software
1AC10.2.2.1.1.11.6 Turnover accounting policy for a construction company
1AC10.2.2.1.1.12 Government grants
1AC10.2.2.1.1.12.1 Accruals model
1AC10.2.2.1.1.12.2 Performance model
1AC10.2.2.1.1.13 Dividend income
1AC10.2.2.1.1.14 Dividend distribution
1AC10.2.2.1.1.16 Financial instruments
1AC10.2.2.1.1.16.1 Trade and other debtors
1AC10.2.2.1.1.16.2 Cash and cash equivalents.
1AC10.2.2.1.1.16.3 Other financial assets.
1AC10.2.2.1.1.16.4 Trade and other creditors.
1AC10.2.2.1.1.16.7 Offsetting financial instruments.
1AC10.2.2.1.1.17 Compound financial instruments.
1AC10.2.2.1.1.19 Hedge accounting
1AC10.2.2.1.1.20.1 Environmental liabilities
1AC10.2.2.1.1.20.2 Closure costs
1AC10.2.2.1.1.21 Contingencies
1AC10.2.2.1.1.22 Employee Benefits
1AC10.2.2.1.1.23 Preference share capital
1AC10.2.2.1.1.24 Share capital
1AC10.2.2.1.1.25 Related party transactions
1AC10.2.2.1.1.26 Interest income
1AC10.2.2.1.1.28 Tangible fixed assets
1AC10.2.2.1.1.30 Investment properties
1AC10.2.2.1.1.31.1 Finance leases
1AC10.2.2.1.1.31.2 Operating leases
1AC10.2.2.1.1.31.3 Lease incentives
1AC10.2.2.1.1.32 Leasing company accounting policy
1AC10.2.2.1.1.33 Intangible assets
1AC10.2.2.1.1.35 Exceptional items
1AC10.2.2.1.1.36 Share based costs
1AC10.2.2.1.1.37 Investment properties
1AC10.2.2.1.1.38 Biological assets (where fair value is used)
1AC10.2.2.1.1.39 Biological assets – Livestock (where fair value model is adopted)
1AC10.2.2.1.1.40 Biological assets – Forestry (where cost model is adopted)
1AC10.2.2.1.1.41 Biological assets – Livestock (where cost model is adopted)
1AC10.3 Changes in presentation and accounting policies and corrections of prior period errors
1AC10.3.1 Extract from FRS102: Section 1AC.7-1AC.9
1AC10.3.2.2. Prior period adjustment disclosure
1AC10.3.2.2.1 Option 1 – Analysis of prior period adjustments
1AC10.3.2.2.2 Option 2: Analysis of prior period adjustments
1AC10.3.2.2.2.3 Profit and Loss reserves note/statement of changes in equity
1AC10.3.2.2.3 Statement in changes in equity note – prior period error/change in accounting policy
1AC10.3.2.2.4 Illustration of change in accounting policy disclosure
1AC10.3.2.2.4.1 Example extract of a change in accounting policy disclosure
1AD11.3.2.5 Change in classification from prior period
1AC10.4 True and fair override
1AC10.4.1 Extract from FRS102: Section 1AC.10
1AC10.5 Notes supporting the statement of financial position
1AC10.5.1 Extract from FRS102: Section 1AC.11-1AC.19
1AC10.5.2.1 Property, plant and equipment/tangible fixed assets. Including revaluation
1AC 10.5.2.1.1 Borrowing costs
1AC10.5.2.2 Intangible assets including revaulation
1AC10.5.2.4 Illustration of the revaluation reserve disclosures.
1AC10.5.2.5 Investment properties note
1AC10.5.2.6 Alternative layout for the investments note and illustration of financial assets
1AC10.6 Details of indebtness and securities held (if any) 91
1AC10.6.2 Extract from FRS 102: Section 1AC.27
1AC10.7.1 Extract from FRS102: Section 1AC.20-1AC.21
1AC10.8 Fair value measurement
1AC10.8.1 Extract from FRS102: Section 1AC.22-Section 1AC.24 and section 1AC.26
1AC10.8.2.2 Extract from the notes to the financial statements – note on investment property
1AC10.8.2.3 Investment note with investment in subsidiary, joint ventures and other investments
1AC10.8.2.4 Extract of notes to the financial statements – Financial instruments note disclosures
1AC10.8.2.4.1 Extract of notes to the financial statements – Interest receivable and similar income
1AC 8.2.4.2 Extract of notes to the financial statements – interest payable and similar expenses
1AC10.8.2.4.3 Alternative disclosure for profit and loss
1AC10.8.2.4.4 Extract from other comprehensive income showing activity on cash flow hedges:
1AC10.8.2.4.4.1 Cash flow fair value hedge reserve disclosure requirements:
1AC10.9 Indebtedness, guarantees and financial commitments
1AC10.9.1 Extract from FRS102: Section 1AC.27-1AC.31
1AC10.9.2.2 Contingencies note
1AC10.9.2.3 Off-balance sheet arrangements note (section 1AC.31 od Appendix C of FRS 102)
1AC10.9.2.4 Commitments notes (section 1AC.31 of Appendix C of FRS 102)
1AC10.9.2.5 Indebtness note and security disclosures
1AC10.10 Notes supporting the income statement / profit and loss accounts
1AC10.10.1 Extract from FRS102: Section 1AC.32-1AC.33
1AC10.10.2.2 Extract to show required profit and loss disclosures
1AC10.10.2.2.1 Exceptional item defined and the disclosure requirements
1AC10.10.2.2.2 Exceptional item disclosure
1AC10.10.2.3 Employee numbers disclosure:
1AC10.10.2.4 Other profit and loss disclosures
1AC10.11 Related party disclosures
1AC10.11.1 Extract from FRS102: Section 1AC.34-1AC.36
1AC10.11.2.1.1 Related party defined
1AC10.11.2.2 Related party note – with related entities
1AC10.11.2.3 Loans, guarantees, credit transactions entered into the benefit of directors
1AC10.11.2.4 Directors remuneration
1AC10.11.7 Controlling Party disclosure
1AC10.12.1 Extract from FRS102: Section 1AC.37-1AC.39
1AC10.12.2.1 Disclosures required describing the entity
1AC10.12.2.2 Post balance sheet events
1AC10.13.1 Auditors remuneration, Interest income or expense from loans to and from group entities
1AC10.13.1.1 Interest income or expense from loans to and from group entities
1AC10.13.1.2 Auditors remuneration
1AC10.13.2 Debtors and Creditors Note as required by Formats
1AC10.13.3 Share capital disclosures
1AD11 Appendix D to Section 1A (applicable for Republic of Ireland entities only)
1AD11.1 Disclosure requirements for small entities in the Republic of Ireland
1AD11.1.1 Extract from FRS102: Section 1AD.1-1AD.2
1A11.1.2.1 Summary section 1A disclosure checklist
1AD11.2.1 Extract from FRS102: Section 1AD.3-1AD.6
1AD11.2.2.1.1 General information
1AD11.2.2.1.2 Basis of preparation
1AD11.2.2.1.3 Consolidation exemption
1AD11.2.2.1.4 Basis of consolidation – (If Applicable)
1AD11.2.2.1.4.1 Subsidiary undertakings
1AD11.2.2.1.4.2 Associates and joint ventures
1AD11.2.2.1.4.3 Transactions eliminated on consolidation
1AD11.2.2.1.5 Business combinations and goodwill
1AD11.2.2.1.8 Intangible assets
1AD11.2.2.1.9 Contingent acquisition consideration
1AD11.2.2.1.10 Financial assets
1AD11.2.2.1.11.1 General turnover accounting policy notes
1AD11.2.2.11.2 Turnover accounting policy for an insurance broker
1AD11.2.2.11.4 Turnover accounting policy note where turnover is derived from investments Turnover
1AD11.2.2.11.5 Turnover accounting policy for a software company
1AD11.2.2.11.6 Turnover accounting policy for a construction company
1AD11.2.2.12 Government grants
1AD11.2.2.12.2 Performance model
1AD11.2.2.14 Dividend distribution
1AD11.2.2.16 Financial instruments
1AD11.2.2.16.1 Trade and other debtors
1AD11.2.2.16.2 Cash and cash equivalents.
1AD11.2.2.16.3 Other financial assets.
1AD11.2.2.16.4 Trade and other creditors.
1AD11.2.2.16.7 Offsetting financial instruments.
1AD11.2.2.17 Compound financial instruments.
1AD11.2.2.20.1 Environmental liabilities
1AD11.2.2.22 Employee Benefits
1AD11.2.2.23 Preference share capital
1AD11.2.2.25 Related party transactions
1AD11.2.2.28 Tangible fixed assets
1AD11.2.2.30 Investment properties
1AC10.2.2.1.1.31.1 Finance leases
1AD11.2.2.31.2 Operating leases
1AD11.2.2.31.3 Lease incentives
1AC10.2.2.1.1.32 Leasing company accounting policy
1AD11.2.2.33 Intangible assets
1AD11.2.2.35 Exceptional items
1AD11.2.2.36 Share based costs
1AD11.2.2.37 Investment properties
1AD11.2.2.38 Biological assets (where fair value is used)
1AD11.2.2.39 Biological assets – Livestock (where fair value model is adopted)
1AD11.2.2.40 Biological assets – Forestry (where cost model is adopted)
1AD11.2.2.41 Biological assets – Livestock (where cost model is adopted)
1AD11.2.2.1.42 Prior period adjustment – Change in accounting policy
1AD11.2.2.43 Change in accounting estimate
1AD11.3 Changes in presentation and accounting policies and corrections of prior period errors
1AD11.3.2 Extract from Section 1AD.8 to 1AD.10 of S1A of FRS 102
1AD11.3.2.2 Prior year adjustment disclosure
1AD11.3.2.2.1 Option 1: Analysis of prior year adjustments
1AD11.3.2.2.2 Option 2 – Analysis of prior year adjustments
AD11.3.2.2.3 Movement in profit and loss reserves note or statement of changes in equity
1AD11.3.2.4 Example extract of a change in accounting policy disclosure
1AD11.3.2.5 Change in classification from prior period
1AD11.4 True and fair view override
1AD11.4.1 Extracts from FRS 102: Section 1AD.11
1AD11.5 Notes to the statement of financial position – fixed assets
1AD11.5.1 Extract from FRS 102: Section 1AD.13 – 1AD.18
1AD11.5.2.1.3 Intangible assets
1AD11.5.2.1.5 Example disclosure for a revaluation reserve
1AD11.5.2.1.6 Investment properties
1AD11.5.2.1.7 Financial assets note
1AD11.6.1 Extracts from FRS 102: Section 1AD.20 – 1AD.21
1AD11.7 Borrowing/creditors details
1AD11.7.1 Extracts from FRS 102: Sction 1AD.26 – 1AD.28
1AD11.8 Appropriation of profit or loss/profit and loss reserve movements
1AD11.8.1 Extract from FRS 102: Section 1AD.35
1AD11.9 Fair value measurement
1AD11.9.1 Extract from FRS 102; Section 1AC.22 to 1AC.25
1AD11.9.2.1 Analysis – fair value disclosure requirements
1AD11.9.2.2 Extract from the notes to the financial statements
1AD11.9.2.2.1 Investment property
1AD11.9.2.2.3 Financial instrument note disclosures
1AD11.9.2.2.4 Fair value reserve disclosures
1AD11.10 Notes to the income statements/profit and loss account
1AD11.10.1 Extract from FRS 102: Sections 1AD.36 to 1AD .37
1AD11.10.2.2 Extract to show required profit and loss disclosures
1AD11.10.2.2.1 Exceptional item defined and the disclosure requirements
1AD11.10.2.2.1.1 Exceptional item disclosure
1AD11.10.2.2.2 Employee note disclosure
1AD11.10.2.2.3 other profit and loss disclosures
1AD11.11 Related party disclosures – director’s remuneration
1AD11.11.1 Extract from FRS 102: sections 1AD.38 to 1AD.40
1AD11.11.2.1 Related parties defined
1AD11.11.2.1.1 Connected person defined
1AD11.11.2.2 Directors remuneration disclosure
1AD11.11.2.2.1 Make up of director’s remuneration
1AD11.12.1 Extracts from FRS 102: 1AD.41 to 1AD.47
1AD11.12.2.1.1 Application to non-companies
1AD11.12.2.1.2 Get out from disclosure if below a specified value.
1AD11.12.2.2 Disclosures of loans and guarantees for the benefit of directors.
1AD11.13 Related party transactions material transactions with directors
1AD11.13.1 Extracts from FRS 102: Secton 1AD.48
1AD11.13.2.2 Is there exemptions from the disclosure?
1AD11.14 Other related party transactions (other than transactions with director)
1AD11.14.1 Extracts from FRS 102: Section 1AD.51
1AD11.15 Ultimate controlling party
1AD11.15.1 Extract from FRS 102: Section 1A.50
1AD11.16 Post balance sheet events
1AD11.16.1 Extracts from FRS 102: Sections 1A.54
1AD.11.17 Guarantees, financial commitments and contingencies
1AD.11.17.1 Extract from FRS 102: Sections 1AD.28 to 1AD.34
1AD11.17.2.2 Contingencies (1AD.31 and 1AD.34 of Appendix D of FRS 102)
1AD11.18 Holding of own shares
1AD11.18.1 Extract form FRS 102; Section 1AD.49
1AD11.19.1 Extract from FRS 102; Sections 1AD.52 – 1AD.53 and 1AD.55
1AD11.19.2.1 Disclosing legal form, registered office, basis of preparation
1AD11.20 Other items required by the formats under Companies Act
1AD11.20.4 Creditors: amounts falling due within one-year note
1AD11.20.5 Creditors: Amounts falling due after more than one-year note
1AD11.20.6 provision for liabilities
1AE.13.1 Additional disclosures encouraged for small entities
1AE.13.1.1 Extract from FRS102: Section 1AE.1
1AE.13.1.2.2 Statement of compliance
1AE.13.1.2.3.1 Transition note adjustments example
1A11.2.2.1 Transition to FRS 102 – first time exemption – Section 1A
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1A.2 OmniPro comment
The requirement for applying section 1A of FRS 102 are detailed in Companies Act. Note however, as per section 1A.4 of FRS 102, where the conditions are met as stated in the Companies Act, even where the entity is not a company it can apply S1A of FRS 102.
1A.2.1 Section 1A – As Applicable to the Republic of Ireland
At the moment Section 1A of FRS 102 has not been updated for the Companies (Accounting). Any references to Companies Act in Appendix A to Appendix C is in relation to the UK.
Given that Section 1A of FRS 102 is not updated this Section of the guide goes through the requirements which are general to all entities and then details the company law requirements as detailed in the Companies (Accounting) Act 2017 which is to be enacted.
1A.2.1.1 Overview
The Companies (Accounting) Act 2017 commenced on the 9th June 2017. It introduced the concept of the Small Companies Regime which is contained in Section 280A-280C of the Companies Act 2014. This allows companies to prepare financial statements under Section 1A of FRS 102 by applying the requirements of the small company’s regime in the Companies Act. Section 1A was updated in December 2017 for the new legislation in time and introduced Schedule D of section 1A which is specific for Republic of Ireland.
1A.2.1.2 Which companies can avail of Section 1A/Small Company’s regime?
A company qualifies for the small company’s regime if it fulfils at least two of the three qualifying conditions listed below:
- In relation to its first financial year; or
- In relation to its current financial year and the preceding financial year; or
- In relation to its current financial year and it qualified as a small/medium company in the preceding financial year; or
- In relation to the preceding financial year and it qualified as a small/medium company in the preceding financial year
| Small Co | Holding company for
Small Group |
|
| Turnover | ≤€12 million | ≤€12 million-net
≤€14.4 million-gross |
| Balance Sheet Total | ≤€6 million | ≤€6 million net
≤€7.2 million-gross |
| Employees | ≤50 | ≤50 |
Note 1: Exception even where the above thresholds are met:
S.280A(4) and S.280B(5) of CA 2014 excludes the following companies from applying the SCR and hence Section 1A:
- a company falling within any provision of Schedule 5 of the Act (e.g. authorised investment firm, insurance intermediary of any other company carrying on of business by which is required to be authorised by the Central Bank); or
- a company that is a credit institution or insurance undertaking; or
- a company with securities regulated on a regulated market; or
- a holding company of a small group even where the group meets the thresholds where any of the entities in the group come within points 1, 2 and 3 above (this only effects the holding company and not the other companies within the group (other than a company that comes within the remit of points 1-3 above)).
1A.2.1.3 What remains the same?
Companies will continue to apply all the measurement and recognition criteria under FRS 102 Sections 2 to 35 of FRS 102. Section 1A only provides disclosure exemptions.
Companies will be able to prepare Section 1A consolidated financial statements for a small group.
1A.2.1.4 What is different?
Companies will be able to prepare consolidated financial statements in line with Section 1A, the small company’s regime and Schedule 3A and 4A of Companies Act 2014.
There is no need to disclose wage costs or split of employee by function in the notes.
1A.2.1.5 What is new?
Provide exemptions from disclosures within each of the 35 Sections of FRS 102. Instead disclosures follow the requirements of Section 1A of FRS 102 which replicate the requirements of the disclosures for small company’s regime in the amended 2014 Companies Act.
The disclosure requirement in Section 1A are the minimum required. Directors are still required to consider if additional disclosures are required in order to show a true and fair view (Section 289 CA 2014).
For companies transitioning to FRS 102 for periods beginning before 1 January 2017 there is an ability to claim;
- the exemption in Section 35.10(v) to recognise debt instruments with related parties (e.g. intercompany loans, directors loans etc.) where a financing arrangement exists (i.e. interest free/favourable interest and not repayable on demand) at the amortised cost at the opening of the current year (and to determine the rate of interest at that time) – no need to restate comparative year etc.; and
- the exemption in Section 35.10(u) not to apply the fair value requirements of Section 11 and 12 until the start of the current year (i.e. no need to restate the comparative year )
No requirement to prepare a cash flow statement.
Reduced related party transaction disclosures.
Appendix A-E discusses the requirements in further details. Also see the detailed disclosure checklist for ROI entities in the disclosures checklist section of the website.
1A.2.2 Section 1A and UK Companies
Section 382 and 383 of the Companies Act 2006 (UK Companies Act) defines a company as a small company if it meets two out of the three of the following criteria:
| Company | Small Group | |
| Turnover – not more than | £10.2 million | £10.2 million net
£12.2 million gross |
| Balance sheet total – not more than | £5.1million | £5.1 million net
£6.1 million gross |
| Average number of employees – not more than | 50 | 50 |
(note these thresholds take effect from 1 January 2016 however early adoption is possible under FRS 102)
NOTE: CERTAIN COMPANIES UNDER SECTION 384 OF COMPANIES ACT 2006 ARE EXCLUDED FROM USING THE SMALL ENTITIES REGIME.
Section 364 of Companies Act 2006 states that the small-entity provisions do not apply in relation to a company’s accounts for a particular financial year if the company was at any time within that year (even where the thresholds are met) the company was—
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(a) a public company,
(b) a company that—
(i) is an authorised insurance company, a banking company, an e-money issuer, a MiFID investment firm or a UCITS management company, or
(ii) carries on insurance market activity, or
(c) a member of an ineligible group. A group is ineligible if any of its members is—
(a) a traded company,
(b) a body corporate (other than a company) whose shares are admitted to trading on a regulated market in an EEA State,
(c) a person (other than a small company) who has permission under Part 4 of the Financial Services and Markets Act 2000 (c. 8) to carry on a regulated activity,
(ca) an e-money issuer,
(d) a small company that is an authorised insurance company, a banking company, a MiFID investment firm or a UCITS management company, or
(e) a person who carries on insurance market activity.
A company is a small company for the purposes of the above if it qualified as small in relation to its last financial year ending on or before the end of the financial year to which the accounts relate.
1A2.3 Choice to apply section 1A of FRS 102
A company that meets the small company definition does not have to apply Section 1A however they can choose to do so.
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Examples
Example 2: Statement of compliance with FRS 102
Example 3: Transition note adjustment
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