A draft Statutory Instrument was laid before parliament on 23 October confirming BIS's September press release and providing details concerning qualification criteria and the contents of micro-entity accounts.
Oddly, use of the micro-entity accounts is available for financial years ending on or after 30 September 2013 but can only be used where the accounts are delivered to the registrar on or after the date the regulations actually come into force. And this date has not yet been released!
As expected, qualification for use is similar to qualification as a small company (ie 2 out of 3 criteria for 2 consecutive years and the ability to use the exemptions is only lost after failing the criteria for 2 consecutive years), and the detailed disclosures required are virtually identical to earlier proposals with slight changes to the wording.
Balance Sheets must be filed and 2 formats are available, the first starting with 'A Called up share capital not paid', followed by 'B Fixed assets', and going through to 'K Capital and reserves'. The second format separates 'assets' and 'liabilities'.
The Profit and Loss Account does not need to be filed but must be produced for members and runs from 'A Turnover' through to 'H Profit or loss'. Additional disclosures will be minimal.
Note that the provisions are not currently available to, for example, charities and LLPs.
BIS repeat the statement that accounts produced in accordance with the Regulations show (somehow!!!) a true and fair view!
There is a fairly widespread opinion that the advantages of using the micro-entity provisions are very limited (little more than an ability to reduce information available in the public domain?) and no-one seems able to see any cost savings other than not using a qualified accountant! Also the information produced does not look useful to anyone trying to understand the performance or position of the company.
We do believe that the role of an accountant involves considerably more than simply preparing a set of accounts and are concerned that clients who hear about micro-entity provisions may anticipate some cost saving, and may be 'disappointed' when this is explained to them!!
Mercia will publish far more detail than shown in this Blog in the near future.