On 25 August, the Department for Business, Innovation and Skills (BIS) and the Financial Reporting Council (FRC) published a discussion paper which proposes simplifying the financial and corporate reporting requirements for the smallest businesses.
Published: 25 August 2011
Comments by: CLOSED
ICAEW has now responded to BIS/FRC on these proposals. View our comment letter below:
The faculty hosted a webinar on 3 November 2011, outlining the proposals and the latest news on the project. The webinar also covered the proposed contents of ICAEW's comment letter to BIS/FRC and provided members with an opportunity to ask questions.
The Financial Reporting Faculty hosted an event with BIS/FRC at Chartered Accountants’ Hall on 3 October 2011. The event featured a presentation by APB chairman Richard Fleck CBE and a Q&A session where members posed their questions to the panel. Download a summary of the Q&As and a copy of the slides below:
The Faculty has also prepared a series of FAQs to provide further information about the proposals.
The discussion paper on ‘Simpler Reporting for the Smallest Businesses’ sets out ideas on how to reduce the amount of reporting micro-entities would be required to undertake.
A micro-entity is defined by the Competitiveness Council in May 2011 as a company with
This covers approximately 60% of UK companies registered at Companies House and 3.5 million unincorporated businesses. Overall, the proposals could benefit around 5 million businesses and result in considerable cost savings in relation to the preparation of their accounts.
The discussion paper proposes easing corporate reporting procedures so that micro-companies are only required to prepare and file:
The discussion paper complements the Office of Tax Simplification’s discussion paper on options for simplifying taxation for the smallest businesses, which was published in July 2011, by proposing aligning financial reporting and tax reporting so that micro-companies would only be required to prepare one set of data, from which all reporting obligations could be met.
The discussion paper also proposes developing an integrated software package to help small businesses prepare financial information. This could allow managers to gain a better understanding of the trends in their businesses’ performance and help them plan for the future.
The paper is not intended as a statement of Government policy. It has been developed to stimulate discussion and gather evidence before the Government decides whether to take forward any further action in this area.
Written responses to the proposals should be provided by 30 October 2011.