Business, Legal & Accounting Glossary
Shortened but audited financial statement that a qualifying small or medium firm was allowed to file with registrar of companies in the UK.
Formerly, a shorter form of annual accounts that could be filed by a company qualifying as a small company under the Companies Act. The use of abbreviated accounts could cut costs and save time. It could also minimise the information made available to others, especially business competitors.
Under the new EU Accounting Directive, which became binding for financial periods beginning on or after the 1st January 2016, the use of abbreviated accounts is no longer possible. Small companies do, however, have the option of filing abridged accounts.
If you run a limited company you will be required to submit various reports to Companies House and HMRC.
If you are a small limited company you may be entitled to file abbreviated accounts to Companies House. The current criteria (from 6th April 2008) for a small company is that you must meet at least two of the following conditions:
The advantage of this is that abbreviated accounts require much less information than full accounts, therefore competitors and the general public will not see detailed information regarding your accounts. Also, most small companies do not require a full audit.
Abbreviated accounts contain a basic balance sheet, which show the assets and liabilities of the company. Assets include things such as bank balances, equipment, vehicles, trade debtors (money customers owe you). Liabilities may include loans, overdrafts, trade creditors (money you owe suppliers. By adding up assets and taking away liabilities it gives a snapshot of your company’s net value. This of course doesn’t provide the full picture, as doesn’t take into account your order book, goodwill, brand, reputation etc.
These accounts should be filed with Companies House 9 months after the year end and can be filed online or sent by post.
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This glossary post was last updated: 9th July, 2019 | 41 Views.