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UK Financial Reporting





The UK financial reporting regime permits different tiers of reporting tailored to the size of your business entity.  Your entity is required to follow UK GAAP (Generally Generally Accepted Accounting Practice).


Financial Reporting Standards (FRSs) are issued by the Financial Reporting Council in the UK, and FRSs 100 to 105 set out UK GAAP, in particular, FRS102.


Small Entities


There are some exceptions based on your circumstances, however as a general rule you qualify for the streamlined small entities financial reporting regime, set out in Section 1A of FRS102, if you meet 2 out of 3 of the following criteria:-


- your annual turnover is not more than £10.2m

- your balance sheet total is not more than £5.1m

- your average number of employees is not more than 50


In order to protect your business as a small company, your members (amounting to 10% or more) are able to require an independent audit of your financial statements.  Otherwise, in most cases, small companies are exempt from the requirement for an audit


As a small entity, you can voluntarily apply EU-adopted IFRS standards, or you can apply the recognition, measurement and disclosure requirements of EU-adopted IFRS standards whilst taking advantage of the reduced disclosure framework permitted by FRS101.


Some businesses entities prefer to use EU adopted IFRS Standards instead of UK GAAP, as this facilitates greater International consistency of financial reporting and is therefore especially useful if there are key international users of their accounts. 


Micro Entities


If you are a micro entity (subject to some exceptions) you qualify for further streamlining of your financial reporting affairs as set out in FRS105 if you meet 2 out of 3 of the following criteria:-


- your annual turnover is not more than £632,000

- your balance sheet total is not more than £316,000

- your average number of employees is not more than 10


Larger entities


For larger entities, your financial reporting is governed by the full FRS102 standard or EU adopted IFRSs, and you will also be required to have an independent audit of your financial statements.


You are a large entity if you meet 2 of the following 3 criteria:


- your annual turnover is greater than or equal to £10.2m

- your balance sheet total is greater than or equal to £5.1m

- your average number of employees is greater than or equal to 50


There are transition rules if your entity meets the above criteria in one year but not the next, or vice versa.


UK listed companies and AIM companies are required to use EU-adopted IFRSs in their consolidated financial statements.  They may choose between EU-adopted IFRSs and UK GAAP in their individual accounts. The majority of other larger UK entities have a choice whether to apply UK GAAP, in the form of the full FRS102 standard, or EU adopted IFRSs.


International Financial Reporting Standards (IFRS Standards) are issued by the International Accounting Standards Board (IASB).  The European Financial Reporting Advisory Group (EFRAG) determines the extent to which the EU adopts IFRSs. You can access the latest status of the EU endorsement of IFRS Standards through this link to the EFRAG website.



Streamlining your financial reporting


We streamline your financial reporting to make the process smooth, efficient and insightful for you, through technical expertise, effective use of technology, making the best use of your systems and working harmoniously with your team.


Achieve Your Vision


Embrace clear thinking so you can achieve your aspirations.


Clarity Advisory Group helps you achieve your vision.




We handle complexity

and provide you with clarity


Embrace clear thinking so you can achieve your aspirations.

"If you're interested in elevating your business with our powerful professional services, please contact us below for friendly assistance and answers to your questions."

Contact details

Clarity Advisory Group

Chartfield Cottage, Shaftesbury Road, Woking, GU22 7DU

Tel: 07487 254 308 /

01483 727 234

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