Small Companies

As in previous legislation, a small company is permitted to prepare and file abridged financial statements with the Registrar. There are additional companies under the 2014 Act that now can qualify as small and therefore prepare and file abridged financial statements. These are outlined in: Exclusions, exemptions and special arrangements.

Under Section 352 and 353, a company that is small can prepare abridged financial statements which include an exemption from filing the following items:

  • The statutory financial statements (Section 352(2)a)
  • The director’ report (Section 352(2)b)
  • The statutory auditor’s report (Section 352(2)c)

 

If a small company avails itself of the above exemptions, then it must annex to its annual return the following:

  • Abridged financial statements;
  • Details of directors and secretary’s interest in shares or debentures of the company as required by Section 329 (See: Information on Interests in Shares & Debentures);
  • A special auditors report prepared in accordance with Section 356. (See below)

 

Content of small company abridged financial statements:

The content required to be included in a small company’s abridged financial statements is set out below:

  • Extract from directors’ report of directors and secretary’s interests’;
  • Directors’ responsibility statement;
  • Special auditor’s report;
  • Abridged balance sheet;
  • Accounting policies (for all items including those in the Profit and Loss account); and
  • Notes that provide certain information (see below table).

 

 Small company abridged financial statements notes Section(s)
Disclosure of directors’ remuneration 305 and 306
Information about directors’ benefits: loans, quasi-loans, credit transactions and guarantees 307 to 313
Information on related undertakings 314 to 316
Disclosures of particulars of staff 317
Details of authorised share capital, allotted share capital and movements 318
Financial assistance for purchase of own shares 319
Holdings of own shares or shares in holding undertaking 320
Disclosure of accounting policies 321
Disclosures about derivative financial instruments where the company has not accounted for them at fair value Sch 3, para 52
Disclosures about financial assets which could be included at fair value but are included at an amount in excess of their fair value and no provision for diminution has been made Sch 3, para 53
Provision for deferred taxation should be shown separately from any provision for other taxation Sch 3, para 57
Details of indebtedness Sch 3, para 58
Basis of which sums originally denominated in a currency different to the functional currency of the company have been brought into account in the balance sheet or profit and loss account Sch 3, para 68
Total amounts falling due within one year and after one year if not shown separately on the face of the balance sheet 353(3)(d)

 

A number of the above items are new requirements and these have been highlighted for clarity.