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Post Info TOPIC: Accounting standards


Senior Member

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Accounting standards


 

Hi all

This is not related to any client just asking out of curiosity really.

I have been reading up about the differences between FRS102 and FRS105 and was wondering that if you had a company as a client who qualified as a micro entity would you automatically be advising them to report using FR105 or would you still prefer to use FRS102, I have read quite a few articles and peoples views and it seems that some have moved all their clients who qualified over to FRS105 whilst others have decided to stick to 102.

Just interested on what your views are and which reporting standards you usually use  

Cheers



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Doug

These are only my opinions of how I see things and therefore should not be taken as advice



Master Book-keeper

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Hi Doug
This one is ripe for a being a huge thread and a great debate, although it seems like everyone might be a wee bit busy at the mo. I certainly am, so just my immediate thoughts

I do wonder why a whole practice can move all of their clients wholesale on to one standard or another when all the guidance from the prof bodies seems to suggest each company should be considered on a case by case basis. Have to say the first thing that struck me was how in hell the Banks and lending institutions conduct their financial checks on businesses wanting new or extended funding (albeit only a small number lend to smaller companies these days) based on FRS105 when there is frankly bog all (technical term) listed at Companies House. I know, before anyone says it, that a full (er) set will be held by the company for the purposes of board meetings and CT returns but the Banks used to only accept a 'different' version to that held at Co House (ie unverified version) if it was from a well known, lots of letters after their name type of Accountant. So where does that leave the small one man band practice and their clients trying to get a business loan in the future. Other quick thought was do some opt for 105 because its easier than the 102 re-valuations bit.



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Joanne  McCormick

Fallows  Hall  Ltd

Winner - Bookkeeper of the Year 2015, 2016 and 2017

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.



Expert

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All mine are FRS105, simply because they are micro entities!

Agree with you Joanne on the barest of info provided, but is it really that much different from abbreviated accounts that went before?



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John 

 

 

 Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.



Master Book-keeper

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Date:

Leger wrote:

All mine are FRS105, simply because they are micro entities!

Agree with you Joanne on the barest of info provided, but is it really that much different from abbreviated accounts that went before?


 Im assuming then thats on a turnover basis and they are some way off the limit John?

The abbreviated accounts werent great, but at least they do give you something to get your teeth stuck into (albeit not as much as the data used to provide).   Perhaps that was always why I never liked the business/commercial end of it all in my banking days, much preferred the real mid/large/mahoosive corporates.



__________________

Joanne  McCormick

Fallows  Hall  Ltd

Winner - Bookkeeper of the Year 2015, 2016 and 2017

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.



Expert

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Posts: 2416
Date:

Well, apart from my Ltd Co's dropping like 9 pins (lost 5 this year, only got two plus my own left now (and one of them I'm likely to drop unless he was joking in our last conversation) all turnovers are sub 100k.

My biggest was a locksmith who's expanded rapidly since he started in 2012, and it's been a pleasure watching him grow, and his turnover had reached £125k, and he left me to go to a chartered because he needed someone more local (which was good but sad at the same time) 

Still some good news may be on the horizon, I'll know more at the end of this week.



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John 

 

 

 Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.



Senior Member

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Date:

Cheshire wrote:


I do wonder why a whole practice can move all of their clients wholesale on to one standard or another when all the guidance from the prof bodies seems to suggest each company should be considered on a case by case basis. 


 Hi Joanne & John

Thanks for the replies, what you wrote above was one of the reasons I posted the question as it seemed from the discussions and articles that I have read that some practices were moving there clients onto FRS105 just because they qualified and not treating them as individual cases and some just decided they did not want to change at all whether it could be better for the company or not.

So far from what I understand I get the impression that if you do have a low turnover company which does not expect to expand past the micro-entity limit then it would probably be best to report using FRS105 just for simplicity but if not then stick with FRS102   

Just trying to get a better understanding of both standards before I unleash myself on LTD Companies financial accounts (which will not be for a while yet)

Cheers 

 



__________________

Doug

These are only my opinions of how I see things and therefore should not be taken as advice



Expert

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Posts: 2416
Date:

Hi Doug

Strictly speaking, you should ask the client which they prefer.  The clients themselves (imo) don't really care. Certainly for my clients, FRS105, because there's hardly anything that would make FRS102 a better option, and they invariably leave it up to me.

The drawback (and one I hadn't considered until Joanne pointed it out) is if the company wants a loan.  However, shouldn't they be using the full accounts anyway?  Joanne indicates they don't (or didn't use to)   I can't see an issue as long as the FRS info matches up to the full accounts info.



__________________

John 

 

 

 Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.



Senior Member

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Date:

Leger wrote:

Hi Doug

Strictly speaking, you should ask the client which they prefer.  The clients themselves (imo) don't really care. Certainly for my clients, FRS105, because there's hardly anything that would make FRS102 a better option, and they invariably leave it up to me.

The drawback (and one I hadn't considered until Joanne pointed it out) is if the company wants a loan.  However, shouldn't they be using the full accounts anyway?  Joanne indicates they don't (or didn't use to)   I can't see an issue as long as the FRS info matches up to the full accounts info.


 Hi John

Thanks for that, Hope you get good news at the end of the week

Cheers



__________________

Doug

These are only my opinions of how I see things and therefore should not be taken as advice

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