PART VIIAccounts and Audit

CHAPTER IProvisions Applying to Companies Generally

Modified accounts

248Qualification of company as small or medium-sized

1

A company qualifies as small in a financial year if for that year two or more of the following conditions are satisfied—

a

the amount of its turnover for the year is not more than £1.4 million;

b

its balance sheet total is not more than £700.000;

c

the average number of persons employed by the company in the year (determined on a weekly basis) does not exceed 50.

2

A company qualifies as medium-sized in a financial year if for that year two or more of the following conditions are satisfied—

a

the amount of its turnover for the year is not more than £5.75 million;

b

its balance sheet total is not more than £2.8 million;

c

the average number of persons employed by the company in the year (determined on a weekly basis) does not exceed 250.

3

In subsections (1) and (2), "balance sheet total" means, in relation to a company's financial year—

a

where in the company's accounts Format I of the balance sheet formats set out in Part I of Schedule 4 is adopted, the aggregate of the amounts shown in the balance sheet under the headings corresponding to items A to D in that Format, and

b

where Format 2 is adopted, the aggregate of the amounts shown under the general heading " Assets ".

4

The average number of persons employed as mentioned in subsections (1)(c) and (2)(c) is determined by applying the method of calculation prescribed by paragraph 56(2) and (3) of Schedule 4 for determining the number required by sub-paragraph (1)(a) of that paragraph to be stated in a note to the company's accounts.

5

In applying subsections (1) and (2) to a period which is a company's financial year but not in fact a year, the maximum figures for turnover in paragraph (a) of each subsection are to be proportionately adjusted.