Abridged Accounts

Business, Legal & Accounting Glossary

Definition: Abridged Accounts


Quick Summary of Abridged Accounts


Abridged accounts are general purpose financial statements intended for both company members and publication.   



What is the dictionary definition of Abridged Accounts?

Dictionary Definition


Under the EU Accounting Directive (2014), Abridged Accounts are a simplified form of annual accounts that in certain circumstances may be filed by an entity qualifying as a small company. The new rules allow certain, detailed types of financial information to be excluded from both a company’s balance sheet (statement of financial position) and the profit and loss account (income statement), but only in the event that’s been unanimously agreed upon by shareholders.

In the UK the new regime applies to the financial period beginning on or after the 1st January 2016.


Full Definition of Abridged Accounts


Abridged accounts are accounts that cover an entire accounting period. However, they do not contain certain detailed financial information.

Abridged accounts can be used to present summary data or to support a proposal. If you are a small company in the UK you may also opt to file abridged accounts with Companies House.

Abridged accounts may be filed with Companies House if you satisfy 2 of the following criteria:

  • your company’s turnover is not greater than £10.2 million
  • the balance sheet total of your company is not greater than £5.1 million
  • the average number of employees in your company does not exceed 50

Abridged accounts afford a company the opportunity to provide less detailed accounts to Companies House, showing a much simpler profit and loss account and balance sheet. There will be fewer ‘lines’ and so less detail. However, companies are still obligated to show a ‘fair and true’ representation of their accounts. A small company is able to abridge either or both of the balance sheet and profit and loss account. If it is decided to abridge the balance sheet then it will not contain notes of what the main headings (creditors, debtors etc) consist of, however, any movement on each kind of fixed asset will be shown. If they decide to file an abridged profit and loss account it will not show the cost of sales and turnover and will begin at the gross profit instead. However, it should be noted, that to do so permission must be granted by each individual shareholder every year.

In the event that it is decided to file abridged accounts, these will be entered into the public record and disseminated amongst the shareholders in lieu of full accounts.

Abridged accounts must have all of the following in them to qualify with Companies House, or you may face a fine or penalty:

  • An abridged profit and loss account and/or an abridged balance sheet.
  • The director’s printed name and signature on the balance sheet.
  • Unless you are claiming exemption it must contain and auditors’ report.
  • A directors’ report – including the printed name and signature of a secretary or director. You do not need to include a business review or strategic report.
  • Notes on the accounts.
  • A statement signed by the director on the balance that the accounts have been prepared in line with the small companies regime.
  • A statement that all shareholders were in agreement filing abridged accounts.

To file your abridged accounts in the UK you can choose one of the following three options:

  1. Sign-in to the governments WebFiling service and select the abridged accounts type.
  2. Create a government gateway account and then you can use the Companies House-HMRC joint filing service. If you do, you are able to file your tax return at the same time.
  3. If you file regularly, you are able to use third-party software.

If you need support or guidance, you can see accounts guidance here.

Please note: as of 2016 you can no longer file abbreviated accounts with Companies House. In terms of for the public record, abbreviated accounts are no longer an acceptable accounting practice after 2016.

 


Examples of Abridged Accounts in a sentence


The notes that have been filed with the balance sheet and submitted as part of the abridged accounts show how much was distributed to the shareholders.


Synonyms For Abridged Accounts


Abbreviated Accounts

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Definition Sources


Definitions for Abridged Accounts are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 21st April, 2020 | 1,687 Views.