Part 15Accounts and reports

Chapter 1Introduction

Companies subject to the small companies regime

383Companies qualifying as small: parent companies

(1)

A parent company qualifies as a small company in relation to a financial year only if the group headed by it qualifies as a small group.

(2)

A group qualifies as small in relation to the parent company's first financial year if the qualifying conditions are met in that year.

F1(2A)

Subject to subsection (3), a group qualifies as small in relation to a subsequent financial year of the parent company if the qualifying conditions are met in that year.

F2(3)

In relation to a subsequent financial year of the parent company, where on the parent company’s balance sheet date the group meets or ceases to meet the qualifying conditions, that affects the group’s qualification as a small group only if it occurs in two consecutive financial years.

(4)

The qualifying conditions are met by a group in a year in which it satisfies two or more of the following requirements—

1. Aggregate turnover

F3Not more than £15 million net (or £18 million gross)

2. Aggregate balance sheet total

F4Not more than £7.5 million net (or £9 million gross)

3. Aggregate number of employees

Not more than 50

(5)

The aggregate figures are ascertained by aggregating the relevant figures determined in accordance with section 382 for each member of the group.

(6)

In relation to the aggregate figures for turnover and balance sheet total—

“net” means after any set-offs and other adjustments made to eliminate group transactions—

(a)

in the case of Companies Act accounts, in accordance with regulations under section 404,

(b)

in the case of IAS accounts, in accordance with F5UK-adopted international accounting standards; and

“gross” means without those set-offs and other adjustments.

A company may satisfy any relevant requirement on the basis of either the net or the gross figure.

(7)

The figures for each subsidiary undertaking shall be those included in its individual accounts for the relevant financial year, that is—

(a)

if its financial year ends with that of the parent company, that financial year, and

(b)

if not, its financial year ending last before the end of the financial year of the parent company.

If those figures cannot be obtained without disproportionate expense or undue delay, the latest available figures shall be taken.