Financial Reporting Law Changes Impacts SMEs
The Financial Reporting Act 2013 (“Act”) came into effect on 1 April 2014 and contains new financial reporting requirements for a variety of entities. The Act replaces the Financial Reporting Act 1993 (“the 1993 Act”) and provides a more pragmatic approach to financial reporting requirements, in particular for small and medium companies.
The Act amends a number of enactments for a range of entities. This allows for a more user friendly legislative approach where the specific financial reporting requirements for an entity are now contained in the statute governing that entity.
The changes allow for a more simplified and targeted regime where compliance costs are more reflective of the size and nature of the entity.
The most significant changes are for small to medium companies. Under the 1993 Act, all companies were required to prepare general purpose financial statements (i.e. financial statements that comply with accounting standards) unless the company fell within narrow exceptions. Now, the size of a company is the key determinate for whether financial statements have to be prepared, audited and/or registered, and many small and medium companies will now fall outside of this criteria.
For further information, and to see whether your company is now exempt, please read the complete article in the PDF below.
PDF version : Financial Reporting Law Changes for SMEs
Prepared by Jessica Weinberg.