For the current financial year, the company has transitioned from FRS 105 (The Financial Reporting Standard applicable to Micro-Entities) to FRS 102, Section 1A (Small Entities) as it no longer qualifies as a micro-entity under the Companies Act 2006.
These financial statements have been prepared under the historical cost convention and in accordance with Financial Reporting Standard 102 section 1A Small Entities "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006.
The transition has resulted in changes to accounting policies and financial statement presentation, as outlined below.
Impact of Transition on Financial Statements
The key changes arising from the transition to FRS 102 are as follows:
Deferred Tax Recognition:
Under FRS 105, deferred tax was not recognised.
Under FRS 102, deferred tax liabilities have been recognised in respect of timing differences on capital allowances and other temporary differences.
As a result, a deferred tax liability of £2,782 has been recorded in the balance sheet, with a corresponding charge to the profit and loss account.
Reclassification of Certain Balances:
Certain financial statement captions have been reclassified to align with FRS 102, including the presentation of fixed assets, intangible assets, and financial instruments.
Additional Disclosures:
Under FRS 102, additional narrative and numerical disclosures have been provided in the notes to the accounts, including disclosures on directors’ remuneration, related party transactions, and financial instruments.
Comparative Figures
The prior year’s financial statements, previously prepared under FRS 105, have been restated where necessary to reflect the new accounting policies under FRS 102.