a Companies Act 1985

The majority of CA 1985 accounting requirements apply equally to small and large companies. However, several important concessions are available for smaller companies and groups, for example:

1. Small companies may present shareholders with a shorter form of accounts (see 22.3).

2. Small and medium-sized companies may file abbreviated accounts of individual companies with the Registrar of Companies (see 22.7).

3. Small and medium-sized groups may claim exemption from the preparation of group accounts (see 25.10).

4. Most companies with a turnover not exceeding 5.6m and gross assets not exceeding 2.8m are entitled to exemption from statutory audit (see 22.12).

5. Small companies may claim exemption from the preparation of cash flow statements under FRS 1 (see 5.1).

6. Recent exemption referred to in 2.1(h) (6) (7) and 2.8(b).

b Accounting Standards and UITF Abstracts

Small companies (as defined below for CA 1985 purposes) may adopt the Accounting Standards Board's "FRSSE" (Financial Reporting Standard for Smaller Entities), in which case they are exempt from all Standards and Abstracts. However, if a small company chooses not to adopt the FRSSE, it must follow all FRSs, SSAPs and UITF Abstracts (see 22.4(d) below).

a Small Company

A company is regarded as "small" for CA 1985 purposes provided it satisfies two sets of requirements:

1. Two out of three of:

   1. turnover not more than 5.6m (if the company's financial year is other than 12 months, the above limit must be adjusted proportionately);

   2. total assets not...