What are Abridged Accounts?

The new Small Companies Regulations (and therefore applied by FRS 102 section 1A) introduced the option to draw up an abridged balance sheet and profit and loss account (where such option is applied these may otherwise be referred to as Abridged Financial Statements/Abridged Accounts).

An abridged balance sheet need only include those items in that format preceded by letters and roman numerals, provided that—

1. in the case of format 1, note (5) of the notes to the formats is complied with,
2. in the case of format 2, notes (5) and (10) of those notes are complied with, and
3. all of the members of the company have consented to the drawing up of the abridged balance sheet

For example, Fixed assets (letter) and Intangible assets (roman numeral) are required, but NOT a breakdown of Goodwill, Other intangible assets (Arabic numeral)

An abridged profit and loss account will combine, under one item called “Gross profit or loss”—

1. items 1, 2, 3 and 6 in the case of format 1, and
2. items 1 to 5 in the case of format 2

provided that, in either case, all of the members of the company have consented to the drawing up of the abridged profit and loss account.

Please note: Items 1,2,3 and 6 in format 1 are; turnover, cost of sales, gross profit and other operating income.

Such consent as is referred to above may only be given as regards the preparation of, as appropriate, the balance sheet or profit and loss account in respect of the preceding financial year, meaning that consent is required each year.

Where abridgement occurs the company is still required to comply with the company law and those accounts must still meet the requirement to give a true and fair view.