The Companies Act 1985 (Accounts of Small and Medium-Sized Enterprises and Publication of Accounts in ECUs) Regulations 1992

Citation and interpretation

1.  These Regulations may be cited as the Companies Act 1985 (Accounts of Small and Medium-Sized Enterprises and Publication of Accounts in ECUs) Regulations 1992 and shall come into force on 16th November 1992.

2.  In these Regulations “the 1985 Act” means the Companies Act 1985.

Delivery and publication of accounts in ECUs

3.  The following section is inserted in the 1985 Act, after section 242A(1)—

“Delivery and publication of accounts in ECUs

242B.— (1) The amounts set out in the annual accounts of a company may also be shown in the same accounts translated into ECUs.

(2) When complying with section 242, the directors of a company may deliver to the registrar an additional copy of the company’s annual accounts in which the amounts have been translated into ECUs.

(3) In both cases—

(a) the amounts must have been translated at the relevant exchange rate prevailing on the balance sheet date, and

(b) that rate must be disclosed in the notes to the accounts.

(4) For the purposes of section 240 any additional copy of the company’s annual accounts delivered to the registrar under subsection (2) shall be treated as statutory accounts of the company and, in the case of such a copy, references in section 240 to the auditors' report under section 235 shall be read as references to the auditors' report on the annual accounts of which it is a copy.

(5) In this section—

“ECU” means a unit with a value equal to the value of the unit of account known as the ecu used in the European Monetary System, and

“relevant exchange rate” means the rate of exchange used for translating the value of the ecu for the purposes of that System.”.

Modifications of Part VII of the 1985 Act with respect to small and medium-sized companies and groups

4.—(1) In section 246 of the 1985 Act (exemptions for small and medium-sized com-panies)(2), the following subsections are inserted after subsection (1)—

“(1A) A company which qualifies as a small company in relation to a financial year is entitled to the exemptions provided by Part I of Schedule 8 with respect to the preparation of annual accounts for that year if its balance sheet contains, immediately above the signature required by section 233—

(a) a statement that advantage has been taken, in the preparation of the accounts, of special exemptions applicable to small companies, and

(b) a statement of the grounds on which, in the directors' opinion, the company is entitled to those exemptions.

(1B) A company which qualifies as a small company in relation to a financial year is entitled to the exemptions provided by Part II of Schedule 8 with respect to the preparation of a directors' report for that year if the report contains, immediately above the signature required by section 234A—

(a) a statement that advantage has been taken, in the preparation of the report, of special exemptions applicable to small companies, and

(b) where the company’s balance sheet for that year does not contain a statement under subsection (1A) (b), a statement of the grounds on which, in the directors' opinion, the company is entitled to those exemptions.”.

(2) In the same section—

(a) in subsection (1)(b) before the words “Schedule 8” there shall be inserted the words “Part III of”,

(b) subsection (2) is hereby repealed, and

(c) in subsection (3) for the words “subsection (1)” there shall be substituted the words “subsections (1), (1A) and (1B)”.

(3) Schedule 8 to the 1985 Act(3) is modified in accordance with the provisions of the Schedule to these Regulations.

5.—(1) Section 247 of the 1985 Act(4) is modified as follows.

(2) In subsection (2)(a), for the words “subsection (1)” there shall be substituted the words “subsection (1) above or was treated as so qualifying under paragraph (b) below”.

(3) In subsection (3), under the heading “Small company”, for the words “Not more than £2 million” (for turnover) there shall be substituted the words “Not more than £2.8million” and for the words “Not more than £975,000” (for the balance sheet total) there shall be substituted the words “Not more than £1.4 million”.

(4) In subsection (3), under the heading “Medium-sized company”, for the words “Not more than £8 million” (for turnover) there shall be substituted the words “Not more than £11.2 million” and for the words “Not more than £3.9 million” (for the balance sheet total) there shall be substituted the words “Not more than £5.6 million”.

6.—(1) Section 249 of the 1985 Act(5) is modified as follows.

(2) In subsection (2)(a), for the words “subsection (1)” there shall be substituted the words “subsection (1) above or was treated as so qualifying under paragraph (b) below”.

(3) In subsection (3), under the heading “Small group” for the words “Not more than £2 million net (or £2.4 million gross)” (for aggregate turnover) there shall be substituted the words “Not more than £2.8 million net (or £3.36 million gross)” and for the words “Not more than £1 million net (or £1.2 million gross)” (for the aggregate balance sheet total) there shall be substituted the words “Not more than £1.4 million net (or £1.68 million gross)”.

(4) In subsection (3), under the heading “Medium-sized group”, for the words “Not more than £8 million net (or £9.6 million gross)” (for aggregate turnover) there shall be substituted the words “Not more than £11.2 million net (or £13.44 million gross)” and for the words “Not more than £3.9 million net (or £4.7 million gross)” (for the aggregate balance sheet total) there shall be substituted the words “Not more than £5.6 million net (or £6.72 million gross)”.

Transitional provisions

7.—(1) These Regulations shall apply to annual accounts in respect of financial years ending on or after the date of coming into force of these Regulations, and to directors' and auditors' reports on those accounts.

(2) In determining under section 247 or 249 of the 1985 Act whether a company or group qualifies as small or medium-sized in relation to financial years subsequent to its first financia l year which end on or after the date of coming into force of these Regulations:

(a) the company or group shall be treated as having qualified as small or medium-sized (as the case may be) in each previous financial year ending on or after 9th November 1990 in which it would have so qualified under section 247(3) or 249(3) as amended by these Regulations; and

(b) the company or group shall be treated as having qualified as small or medium-sized in any such financial year if they would have been so entitled had the company or group had the qualification it is treated as having had under sub-paragraph (a) above.

N. Hamilton

Parliamentary Under-Secretary of State for Corporate Affairs,

Department of Trade and Industry

15th October 1992