Notes to the final accounts

vinukmathews

HI,
I am aat licensed accountant. While searching through practice assurance checklist, i have seen that the financial accounts should have all relevant notes like basis of profit calculation, details of directors loan account, and other polices, if not it would cause disciplinary actions from aat. I usually prepare micro entity company accounts for clients. My software is not attaching all those notes i have mentioned above but only three notes are shown. Is it ok if i prepare with 3 notes without including all notes and polices?

hal978

Micro entity accounts (FRS 105) do not include most of the notes that are included in the accounts prepared under other financial reporting standards (or under Old UK GAAP, such as FRSSE). For example, they don't include notes on accounting policies, directors remuneration, related party disclosures, etc.

Any notes required are also included at the foot of the balance sheet. They are normally directors advances, credits and guarantees, and financial commitments, guarantees and contingencies. I've read the FRS 105 from the Financial Reporting Council website and I found it useful.

vinukmathews

So are you saying that i should include all the notes and policies even if it is not required by micro entity company?

hal978

No, you shouldn't include what is not required in the Statutory Accounts (unless the directors voluntarily disclose), but it is good practice to prepare detailed P&L and Balance Sheet to send to the directors to show the breakdown of items. I know that VT software can do this for example.

vinukmathews

Yeah i do send detailed P&L but my balance sheet is not that detailed as i am preparing it in taxfiler to get signed from them. The notes only contain barely 3 points. Do i need to include breakdown of directors loan account in the statutory accounts statements?

hal978

If the directors loan account was in credit throughout the current period and the previous period, there is no need for a note.

If it was in debit at any time, then the following is required (copied from FRS 105):

Details of advances and credits granted by a micro-entity to its directors and guarantees of any kind entered into by a micro-entity on behalf of its directors must be shown in the notes to the financial statements.
The details required of an advance or credit are:
(a) its amount;
(b) an indication of the interest rate;
(c) its main conditions;
(d) any amounts repaid;
(e) any amounts written off; and
(f) any amounts waived.
There must also be stated in the notes to the financial statements the totals of amounts stated under (a), (d), (e) and (f).

FAC

I am also using Taxfiller. This system has a reliable policy and generic note checking system. If a note that should be shown and you forget to show it warns you.