Definition
FRS 105 is the UK accounting standard for companies that use the micro-entities regime. Its full title is “The Financial Reporting Standard applicable to the Micro-entities Regime”, and it is issued by the Financial Reporting Council (FRC). It sets the simplified balance sheet and profit and loss formats, the few notes required and the accounting rules a micro-entity must follow.
The main rules
- Assets are recorded at cost, less depreciation where relevant. Revaluing them to market value is not allowed.
- Deferred tax is not recognised, so only the current tax charge appears.
- Accounts prepared under the micro-entity provisions are presumed by law to give a true and fair view.
Example
ABC Lettings Ltd, a micro-entity, bought a buy-to-let flat for £180,000. Under FRS 105 the flat stays in the accounts at depreciated cost, even if it is now worth £220,000.
FRS 105 or FRS 102?
A micro-entity does not have to use FRS 105. It can prepare small company accounts under FRS 102 Section 1A instead, which needs more notes and accounting policies. For the formats and notes line by line, see FRS 105 explained in plain English.
SmartFiling prepares FRS 105 accounts as part of its micro-entity accounts filing service.
Related questions
- What do micro-entity accounts include? A balance sheet, a simple profit and loss account and a few notes, with the directors' statements on the balance sheet.
- Where can I see a company's micro-entity accounts? On the public Companies House register, where the filing history lists them as "Micro company accounts".
Related terms
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Micro-entity accounts
Micro-entity accounts are the simplified annual accounts that a company qualifying as a micro-entity can prepare under the accounting standard FRS 105.
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Micro-entity
A micro-entity is the smallest category of UK company under company law.
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Small company accounts
Small company accounts are annual accounts prepared under the small companies regime, normally using the accounting standard FRS 102 Section 1A.
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Balance sheet
A balance sheet is a snapshot of a company's finances on the last day of its financial year.
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Profit and loss account
The profit and loss account (P&L, also called the income statement) shows a company's income, costs and resulting profit or loss for its financial year…
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