Companies Act Entity Financial Statements

Each set of financial statements shall comprise of a balance sheet and a profit and loss account plus any other additional statements and information required by the financial reporting framework adopted.

As well as adhering to the applicable accounting standards and the other provisions of the Act (primarily set out in Part 6), each set of Companies Act financial statements is also required to comply with the provisions of Schedule 3 as to the accounting principles applied, the form and content of the principal statements and the additional information to be provided in the notes.

With regard to the format of financial statements, all entities preparing Companies Act financial statements, including companies limited by guarantee (CLG’s) and unlimited companies (ULs), must apply one of the formats set out in Schedule 3. Each of the items listed in any of the formats adopted must be shown in the order and under the headings and sub-headings so provided. A company may show greater detail than required if they so wish plus certain items (denoted by Arabic numerals i.e 1,2,3 etc) may be combined where the individual amounts concerned are not material to assessing the financial position or profit or loss provided they are separately disclosed in the notes. These formats are set out in Appendix 1 (balance sheet) & Appendix 2 (P & L formats)  Once a format has been adopted by a company, the directors must adopt the same format in subsequent financial years unless there are special reasons for the change and these reasons are clearly disclosed in a note to the affected financial statements.


CA 2014 summary of changes – disclosures in Companies Act Entity Financial Statements:

• Balance sheet and profit and loss account formats remain essentially the same, however some of the individual line items have been changed such as ‘accruals and deferred income’ now being required to be separately presented, plus shares classified as equity and shares classified as a liability being specifically required to be identified.

• Additional considerations when disclosing staff costs:

  • categories of staff costs expanded/updated
  • amount of staff costs capitalised in the financial year must be shown
  • other types of staff compensation must be specified by type
  • average number of employees for the financial year must be calculated with reference to monthly numbers

• Additional considerations when disclosing share capital:

  • must now disclose number as well as nominal value of authorised share capital
  • must disclose separately details of shares presented as equity and those presented as a liability (also required where shares were allotted during the financial year)
  • where there is any contingent right to shares in a company, additional disclosures are required around this
  • a holding company must disclose the number, description and nominal value of shares in the company held by any of its subsidiary undertakings or their nominees and the consideration paid for those shares

• The definition of ‘auditor’s remuneration’ has been expanded to include reimbursement of expenses

• Comparative amounts for all items shown in the financial statements, including ‘fixed assets’, ‘reserves’ and ‘provisions’, must now be shown