FRS 105 Micro Entity Accounts in Gorebridge

FRS 105 is the financial reporting standard used in the UK and Republic of Ireland by companies that apply the micro-entities regime. It sets out how a qualifying micro-entity recognises and measures items in its financial statements and what it must disclose in the notes. It is deliberately simpler than the standards used by larger companies: accounting is generally on a historical cost basis, several optional treatments available elsewhere are not permitted, and the disclosure requirements are significantly reduced. FRS 105 Micro Entity Accounts are therefore shorter and more straightforward than a typical set of small company accounts.

FRS 105 is available to companies that qualify for the micro-entities regime and then choose to apply it. Qualification is based on size, but size alone is not the whole story — the regime has its own rules and exclusions, and some companies are not eligible regardless of how small they are. If your company qualifies and you decide the micro-entities regime is appropriate, FRS 105 is the standard that applies to the accounts. If it does not qualify, or you prefer a fuller set of financial statements, a different framework such as FRS 102 would be used instead.

No. The micro-entities regime is an available accounting regime, not a mandatory one. A company that qualifies for it may choose to apply it, in which case FRS 105 applies, or it may instead prepare its accounts under a different framework such as FRS 102. There are legitimate reasons to prefer a fuller framework — for example where a lender, investor or group parent expects more detailed information — so the choice should be made with your circumstances in mind rather than by default.

For accounting periods beginning on or after 6 April 2025, a company generally needs to meet at least 2 of the following 3 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 during the period. Meeting two of these three conditions is the starting point, but other eligibility rules and exclusions can still apply, and the position can change if your company's figures move above or below the thresholds in later periods. It is always worth confirming eligibility for the specific period in question rather than assuming it carries over.

Both are UK financial reporting standards, but they are aimed at different sizes of company. FRS 105 is the micro-entities standard: it uses a simplified recognition and measurement basis, generally historical cost, with fewer accounting options and much shorter disclosures. FRS 102 is the standard for small and larger entities and gives more flexibility — for example around fair value, revaluation and certain financial instruments — but it also requires considerably more disclosure and produces a longer set of accounts. Moving between the two can affect the figures reported, so it is a decision worth taking advice on.

Yes — where a company is required to file accounts, the accounts prepared under FRS 105 form the basis of that filing, and micro-entity accounts are commonly filed in a simplified form with the balance sheet and supporting notes. Filing accounts at Companies House is a separate exercise from your Corporation Tax obligations, and the way small and micro-entity accounts are filed is changing, with Companies House moving towards digital filing and greater transparency around the information provided. Because implementation has been staged, check the current position before you file.

Yes, they are two distinct things. FRS 105 Micro Entity Accounts are the financial statements prepared under the micro-entities regime — they are the company's accounts for its members and for the accounts filing requirement. A CT600 is a Corporation Tax Return submitted separately to HMRC. The accounts are normally the starting point for the tax return, but the tax computation applies tax rules that differ from accounting rules, so the two are prepared separately even though they draw on the same underlying records.

We generally work from your bookkeeping records for the period, along with bank statements, sales invoices and receipts, purchase invoices and expense records, payroll and employee information, details of assets bought or sold, loan and finance agreements, and stock or work-in-progress figures where relevant. It also helps to have the previous year's accounts, any relevant correspondence, and an idea of anything unusual that happened during the period — a one-off purchase, a change in activity, or a director's loan movement, for example. The more complete the records, the more straightforward the preparation tends to be.