• Register
Return to: Home > News > Regulation > UK BIS to implement reporting exceptions for micro-entities

UK BIS to implement reporting exceptions for micro-entities

The UK Department for Business, Innovation and Skills (BIS) is to implement the EU Directive 2012/6/EU, also known as Micros Directive, which allows micro-businesses to prepare and publish simplified financial statements.

According to the directive, a company can be considered a micro-entity if it meets two of the three following characteristics: balance sheet total of €316,000 ($417,218); net turnover of €632,000 and an average of ten employees during its fiscal year.

BIS published the result of a consultation that was broadly supportive of the reporting exceptions, although two main concerns were raised by respondents.

First, the impact on the simplified financial reporting on the true and fair value principle; and secondly, the effect on the UK's accrual accounting framework.

The Institute of Chartered Accountants in England and Wales head of financial reporting faculty Nigel Sleigh-Johnson said each micro-business should consider carefully the practical impacts of the exceptions.

Sleigh-Johnson explained micro-entities should assess if there are risks involved in reducing the financial information they make available to finance providers and other stakeholders.

Sleigh-Johnson added: "We are strong supporters of efforts to tackle excess regulation of UK businesses, but have repeatedly cautioned against presenting requirements on businesses to produce important financial information as simply another aspect of 'red tape'.

BIS said it will implement the Micros Directive and bring forward regulations for parliamentary consideration, but it will exclude those parts of the directive that could clash with the UK's accrual accounting framework.

"We were seriously worried that proposals - now dropped - to allow a partial exemption from tried and tested accruals accounting would have had a negative impact on market confidence and potentially hamper micro businesses' ability to access finance," Sleigh-Johnson said.


Related links


The Institute of Chartered Accountants in England and Wales

Top Content

    Accountancy Europe: the winner takes it all

    Jonathan Minter spoke to Olivier Boutellis-Taft, chief executive officer at Accountancy Europe, about how technology could change the industry, and how training needs to keep up to enable the profession to develop

    read more

    Embracing global technology trends

    Accountancy Europe’s Digital Day 2018 found the European accounting profession looking to tackle the challenges presented by new technologies head on. Jonathan Minter reports from the day

    read more

    IMA Conference: automation of the audit

    At the annual conference of the Institute of Management Accountants (IMA) in Indianapolis, Deloitte partner Alex Smith gave a presentation on digital transformation in the profession. Joe Pickard spoke to Smith following the presentation to find out more about his views on the future of audit

    read more

    IMA Conference: technology and the human effect

    The annual conference of the Institute of Management Accountants (IMA) took place in Indianapolis this year. Members of the profession gathered to hear the latest from the institute and other market players, covering some of the challenges and opportunities the profession faces.

    read more

    The Caribbean: a digital paradise

    The ICAC hosted its 36th annual conference in June this year – very much looking to the future following a tough 2017 for the Caribbean. Jonathan Minter spoke with chief executive officer Misha Lobban Clarke

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.