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Section 6 – Statement of Changes in Equity and Statement of Income and Retained Earnings
Scope of this section
Section 6 sets out requirements for presenting the changes in an entity’s equity for a period, either in a statement of changes in equity or, if specified conditions are met and an entity chooses, in a statement of income and retained earnings.
Small companies
Extract from FRS102: Section 6.1A
6.1A A small entity applying Section 1A Small Entities is not required to comply with this section. However, paragraph 1A.9 encourages a small entity to present a statement of changes in equity or a statement of income and retained earnings.
OmniPro comment
Note small companies in the UK and Northern Ireland are not required to comply with this section instead these small entities must comply with Section 1A of FRS 102. See guidance in relation to same in Section 1 of this guide where full details are provided. Although a small company is not required to comply with this section it would be good practice to include a changes in equity or a statement of income and retained earnings.
The exemption for small companies does not apply to companies in the Republic of Ireland at this time as Republic of Ireland registered companies cannot report under Section 1A of FRS 102. A company registered in the Republic of Ireland cannot apply this exemption and therefore adopt Section 1A until the Irish Government enact the EU directive 2013/34 for Ireland. This is expected to be issued in early 2016 however where financial statements are prepared and signed off before the enactment of this directive, Section 1A cannot be applied so therefore Section 6 must be applied in full.
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