Risks of Getting Your Statutory Accounts WrongGet the Statutory Accounts wrong and apart from the risk of fines or penalties, there’s the risk of paying the wrong amount of tax because that leased asset was accounted for incorrectly, or losing some credit rating because that deferred payment or loan balance wasn’t placed in the correct category. The risks of getting it wrong now are significantly higher due to the fundamental changes in 2016 that have occurred in UK Generally Accepted Accounting Practice (UK GAAP) following the wholesale replacement of Financial Reporting Standards by the Financial Reporting Council and related changes to Companies legislation.
What Form of Accounts? Size really does matter!Under the new Financial Reporting regime there is a bewildering array of options in relation to the form of Statutory Accounts that you can or must prepare, many of which depend upon the size of your company. The form of Accounts ranges from Micro-Entity Accounts through to full blown Accounts prepared under EU-adopted International Financial Reporting Standards.
The vast majority of companies in the UK will be eligible to prepare their Accounts under the Micro-Entity regime but that may not be the best choice in all cases; how do you decide what is best for you? Small companies will generally prepare their accounts under the Small Companies regime but within that there is a choice of preparing and filing Abridged Accounts or filing so-called “filleted” Accounts thereby reducing the amount of, sometimes sensitive, financial information available on public record. The rules are not easy to follow and if you get it wrong it exposes you to fines and penalties. With the rules for what is “micro” and what is “small” likely to change over the years the risk of getting it wrong increases as do missing opportunities to use the entitlements to reduced disclosures.