What is FRS 105?
Definition of FRS 105
FRS 105 is a financial reporting standard that is available to companies in the UK that are ‘micro-entities’. Under FRS 105, HMRC allows these companies to keep a simpler set of accounts than those required of small, medium or large companies.
Micro-entities are companies that meet two or more of the following requirements:
- A turnover of £632,000 or less.
- £316,000 or less on the company’s balance sheet.
- 10 employees or fewer.
Businesses using FRS 105 must file the following with HMRC annually:
- An Income Statement (this is also sometimes known as a ‘Profit and Loss account’).
- A Balance Sheet (this is also sometimes known as a ‘Statement of Financial Position’)
- Footnotes explaining any company director transactions.
Companies using FRS 105 must also file their Balance Sheet and the footnotes explaining director transactions with Companies House.
FRS 105 in FreeAgent
Companies that meet HMRC’s definition of a micro-entity can file Final Accounts directly to Companies House from FreeAgent. The data in the Final Accounts report in FreeAgent is populated automatically based on the transactions that you enter throughout the year.
Disclaimer: The content included in this glossary is based on our understanding of tax law at the time of publication. It may be subject to change and may not be applicable to your circumstances, so should not be relied upon. You are responsible for complying with tax law and should seek independent advice if you require further information about the content included in this glossary. If you don't have an accountant, take a look at our directory to find a FreeAgent Practice Partner based in your local area.