The Companies (Accounting) Act, 2017 (CAA 2017) came into effect from 9 June 2017. Among other matters, it allows certain types of company called ‘micro companies’ use FRS 105, the Financial Reporting Standard applicable to the Micro-Entities Regime as well as allowing use of Section 1A of FRS 102 for certain types of ‘small’ entity. Similar legislation was adopted in the UK in July 2015.

The new law will have a significant impact for many private Irish companies in relation to audit exemption, financial reporting and disclosure of financial information. The new law may be early adopted by companies for accounting periods commencing from 1 January 2017 but may also be back-dated to accounting periods commencing as early as 1 January 2015. In a later post, we will look at some of the advantages and pitfalls of early adopting certain provisions in the CAA 2017.

Implementation of FRS 105 will mean that certain qualifying micro companies will not have to disclose details of directors’ remuneration, profit and loss account or include a director’s report in their filed financial accounts. Importantly the standard is not available to charities and not for profit entities, regulated entities and groups. It could be used by a ‘micro’ subsidiary within a group, that was being consolidated under FRS 102.

The new company size criteria under the Companies (Accounting) Act, 2017 are:






Less than €700,000

Less than €12m

Less than €40m

€40m or greater

Balance sheet total (total assets, ignore liabilities)

Less than €350,000

Less than €6m

Less than €20m

€20m or greater

Number of employees

Less than 10

Less than 50

Less than 250

250 or greater

To file accounts under FRS 105 companies must satisfy two out of three criteria in the table above for two consecutive years, unless it is the first financial year of the entity.

Meanwhile in the UK, the HMRC have just published a paper on the tax impact of FRS 105. The document confirms that although FRS 105 itself is intended for companies and certain other entities, HMRC (and no doubt likewise the Irish Revenue) will generally accept calculations of profit for unincorporated businesses prepared under FRS 105, if they meet the size criteria to apply FRS 105.

To hear more about FRS 105, come to our next CPD course on the topic as part of the Update for the Busy Accountant on Monday 27 November 2017.

We also have other CPD courses in November 2017. Click here for details and booking on all courses.