The financial statements for the year ended 30 April 2024 have been prepared under FRS 105, The Financial Reporting Standard applicable to the Micro-entities Regime. This represents a change from the previous financial year, where the accounts were prepared under FRS 102 Section 1A.
The reason for the change is that the company qualifies for Micro 105 accounts to be prepared.
Impact of Transition
As a result of the transition to FRS 105, the company is no longer permitted to carry freehold property at a revalued amount. Consequently, the revaluation previously recognised under FRS 102 Section 1A has been reversed, and the freehold property is now measured at historic cost.
This adjustment has resulted in:
- A decrease in the carrying value of freehold property by £42,650 as at 30 April 2024.
- A corresponding reduction in equity (revaluation reserve) by £42,650.
There is no impact on profit or loss for the year, as the adjustment relates solely to the recognition of the property at historic cost.