FRS 105 and FRS 102 Section 1A compared

The two standards side by side

	FRS 105 micro-entity	FRS 102 Section 1A small
Turnover	Not more than £1 million	Not more than £15 million
Balance sheet total	Not more than £500,000	Not more than £7.5 million
Employees	Not more than 10	Not more than 50
Size test	Two of the three limits	Two of the three limits
True and fair	Presumed when only the micro-entity minimum items are given	The accounts must give a true and fair view
Revaluation and fair value	Not allowed	Allowed
Directors' report	Not required	Prepared; under current law it need not be filed

Questions

When did the size limits change?

The micro-entity limits rose from £632,000 turnover and £316,000 balance sheet, and the small company limits from £10.2 million and £5.1 million, for financial years beginning on or after 6 April 2025. For the two-year size test, earlier years are judged as if the new limits had always applied.

What notes do FRS 105 accounts need?

Only the information required by paragraph 57 of Part 3 of Schedule 1 to the accounting regulations, as regulation 5A of SI 2008/409 sets out.

What changed in FRS 102 from 1 January 2026?

The FRC's periodic review applies to accounting periods beginning on or after 1 January 2026. It brings a five-step revenue model into FRS 102 and FRS 105, puts most leases on the balance sheet under FRS 102 (FRS 105 lease accounting is unchanged), and says more clearly which disclosures a small entity applying Section 1A must give. A small entity must now give the Appendix C disclosures as a minimum.

Can a company file a profit and loss account under either standard?

Under current law small companies and micro-entities may choose not to file their profit and loss account. From April 2028 they will have to file it, with an option not to have it published. See Companies House accounts changes in 2028.

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