An important question that directors and shareholders of small companies should ask their accountant is “what should be disclosed in the company’s financial statements?” It is important to consider whether your small company is disclosing too much, or too little, information in its financial statements which are filed at Companies House.
It is important to remember that Companies House is a public record that anyone can access.
Since the introduction of FRS 102 Section 1a (for small companies), the introduction of the reduced disclosure of the micro entity regime and the change from filing “abbreviated accounts” to filing “filleted accounts”, there has been much confusion about what and how much should be disclosed in a company’s financial statements. The advent of HMRC and Companies House “do it yourself” filing tools has also led to many small companies over disclosing financial information at Companies House.
Over disclosure may lead to sensitive information being available to the public and may help competitors obtain a better idea of the company’s performance or allow your neighbours and friends to have an idea of your personal finances. On the other hand, companies that under disclose may find it harder to obtain finance from banks or credit facilities with suppliers.
It is important that the amount of disclosure that is required by accounting standards and law is considered carefully before filing financial statements at Companies House and holding a discussion with a qualified accountant is always a good idea.
Author: Chris Morey, Director, Plus Accounting
Any views or opinions represented in this blog are personal, belong solely to the blog owner and do not represent those of Plus Accounting. All content provided on this blog is for informational purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site.