FRS 105 Micro Entity Accounts in Dartford

FRS 105 is the UK financial reporting standard that supports the micro-entities regime. It is the framework that a qualifying micro-entity applies when it chooses to prepare its annual financial statements under that regime. In practical terms, it sets out how figures are recognised, measured and presented, generally allowing simpler measurement bases such as historical cost and requiring a more limited set of disclosures than FRS 102. The result is still a set of statutory accounts containing a balance sheet, notes and the required statements — just prepared on a proportionate basis.

FRS 105 is intended for companies that qualify for the micro-entities regime and then decide to apply it. Qualification depends on meeting the size conditions and on not being excluded by any of the other eligibility rules. Meeting the size conditions alone does not automatically mean a company qualifies, and qualifying does not mean a company must apply the regime — it remains a choice. We look at your company's specific position before confirming whether FRS 105 is appropriate.

No. The micro-entities regime is an available accounting regime for companies that qualify for it, not a mandatory one. A qualifying company can choose to apply the micro-entities regime and therefore FRS 105, or it can prepare its accounts under a different framework such as FRS 102. The decision usually comes down to the level of disclosure the directors want, the needs of lenders or investors, and whether any shareholders or other parties expect a fuller set of accounts.

For accounting periods beginning on or after 6 April 2025, a company generally needs to meet at least 2 of the 3 applicable size conditions: turnover of no more than £1 million, a balance sheet total of no more than £500,000, and an average of no more than 10 employees. These are size conditions, not the whole test. Other eligibility rules and exclusions can apply — for example, certain company types are not permitted to use the micro-entities regime — so the criteria should be checked against your company's actual circumstances rather than assumed.

FRS 102 is the broader UK financial reporting standard applied by most small and medium-sized companies, while FRS 105 is the more streamlined framework available to qualifying micro-entities. FRS 105 generally works on a simpler measurement basis, most commonly historical cost, and requires fewer disclosures. FRS 102 permits more accounting policy choices, such as revaluation of certain assets, and expects a fuller set of notes. The practical effect is that FRS 105 accounts are shorter and less detailed, which suits many very small companies but may not suit those needing to present a more comprehensive picture.

Yes. Preparing accounts under the micro-entities regime does not remove the need to file them. FRS 105 Micro Entity Accounts are statutory accounts and are delivered to Companies House in the normal way, using the filing method appropriate to your company. The accounts filed are the financial statements prepared under FRS 105; they are not the same document as a Corporation Tax Return or a Confirmation Statement, each of which serves a different purpose and is dealt with separately.

Yes, they are separate outputs with separate purposes. FRS 105 accounts are the financial statements prepared under the micro-entities regime and filed with Companies House. The CT600 is the Corporation Tax Return submitted to HMRC, which calculates the company's tax position using figures that are usually derived from, but adjusted from, the accounts. A Confirmation Statement is a third, separate filing that confirms company information such as directors and shareholders. Keeping all three consistent and correctly prepared avoids unnecessary queries later.

A newly incorporated company can potentially use FRS 105 if it qualifies for the micro-entities regime and chooses to apply it. A first accounting period is often shorter than twelve months, and the size conditions need to be considered in relation to the period in question and the relevant rules, so it is worth checking rather than assuming. In practice, many new companies do meet the size conditions from the outset, but any exclusions still need to be ruled out before preparing accounts on that basis.

Typically we would need your bookkeeping or accounting records for the period, bank statements and reconciliations, sales and purchase ledgers, payroll information if you employ staff, details of any assets or liabilities including loans and hire purchase agreements, and a breakdown of any share capital or director's loan movements. It also helps to know about anything unusual during the period — a change of year end, an asset acquisition or disposal, or a new subsidiary. The more complete the records, the more straightforward the preparation of your FRS 105 Micro Entity Accounts will be.