What goes in FRS 102 small company accounts? (Section 1A)

In short: FRS 102 Section 1A small company accounts contain a balance sheet in Format 1 or Format 2, a profit and loss account, the notes required by the Companies Act and Schedule 1 to SI 2008/409, and a directors' report. Companies House needs only the balance sheet and notes; members and HMRC get everything (GOV.UK: Micro-entity, small and dormant company accounts).

Check your filing dates with the Corporation Tax deadline calculator, or take the 30-second check to see whether Taxley fits your company.

What is included in FRS 102 Section 1A small company accounts in 2026?

FRS 102 Section 1A small company accounts in 2026 have five parts: a balance sheet, a profit and loss account, notes to the accounts, a directors' report, and the board's approval with a director's signature on the balance sheet. The accounts must give a true and fair view, with no presumption to lean on (CA 2006 s.396).

A company is small if it meets at least two of three limits: for periods beginning on or after 6 April 2025, turnover of no more than £15 million, a balance sheet total of no more than £7.5 million and no more than 50 employees (CA 2006 s.382). Section 1A is the part of FRS 102, the Financial Reporting Council's main UK accounting standard, that cuts presentation and disclosure for small entities while keeping FRS 102's full recognition and measurement rules (FRC). A small company above the micro-entity limits uses it, and a micro-entity may choose it; the FRS 105 vs FRS 102 guide covers that choice. Members get the full set, and HMRC receives it in iXBRL with the Company Tax Return (CT600) (GOV.UK: Businesses XBRL guide). The table lists each part of Section 1A accounts and whether it reaches the public register in 2026.

What does Section 1A add over micro-entity accounts?

Section 1A accounts go further than micro-entity accounts in three ways. The directors must judge that they give a true and fair view, without the micro-entity presumption; they carry fuller notes, such as accounting policies and fixed asset movements; and they may show assets at valuation or fair value, which micro-entity accounts can't (SI 2008/409 reg 3).

The table compares the two sets of accounts for a company that could use either.

The true and fair view is the biggest difference. Section 396(2A) of the Companies Act 2006 presumes a micro-entity's minimum items give a true and fair view, and section 396(6) switches off the duty to add more. A Section 1A company has no such presumption: section 396(4) says that where the required information is not enough for a true and fair view, the necessary additional information must be given in the accounts or notes (CA 2006 s.396). Valuation is the second difference. Regulation 3(1A) of SI 2008/409 takes the alternative accounting rules and the fair value rules away from a micro-entity only. A small company may include tangible fixed assets at market value or current cost under paragraph 32 of Schedule 1, and investment property and stocks at fair value under paragraph 39 (SI 2008/409 Sch 1 para 39). The micro-entity accounts guide sets out the FRS 105 version in full.

What is the FRS 102 small company balance sheet format?

A small company balance sheet follows Format 1 or Format 2 in Section B of Part 1 of Schedule 1 to SI 2008/409. Format 1 runs down the page from A, called-up share capital not paid, to K, capital and reserves, and splits the main headings into Roman-numeral items such as tangible assets, stocks and debtors (SI 2008/409 Sch 1).

The Format 1 headings are: A called-up share capital not paid; B fixed assets; C current assets; D prepayments and accrued income; E creditors falling due within one year; F net current assets (liabilities); G total assets less current liabilities; H creditors falling due after more than one year; I provisions for liabilities; J accruals and deferred income; and K capital and reserves (SI 2008/409 Sch 1). Fixed assets split into I intangible assets, II tangible assets and III investments. Current assets split into I stocks, II debtors, III investments and IV cash at bank and in hand. Capital and reserves split into I called-up share capital, II share premium account, III revaluation reserve, IV other reserves and V profit and loss account. A note to the formats requires debtors falling due after more than one year to be shown separately. Format 2 holds the same items, with assets in one block and capital, reserves and liabilities in the other. Unlike a micro-entity, a small company must show the Roman-numeral items, even in abridged accounts.

Abridged accounts are a Schedule 1 option for small companies in 2026. Paragraph 1A lets the directors show only the items preceded by letters and Roman numerals, if all the members consent, and it isn't available to a company that was a charity at any time in the year (SI 2008/409 Sch 1 para 1A). The directors must then deliver a statement that all the members consented, under section 444(2A) of the Companies Act 2006. Abridging cuts detail on the face of the accounts, not the disclosures: GOV.UK says abridged accounts contain a simpler balance sheet "along with any notes" (GOV.UK: Micro-entity, small and dormant company accounts). GOV.UK also says the option to file abridged accounts is being removed from April 2028 (GOV.UK: Companies House accounts filing changes from April 2028). The filleted, abridged or full accounts guide compares the filing choices.

Which profit and loss account format does a small company use?

A small company picks one of the two profit and loss account formats in Schedule 1. Format 1 analyses costs by function: cost of sales, distribution costs and administrative expenses, with a gross profit line. Format 2 analyses them by nature: raw materials and consumables, other external charges, staff costs and depreciation (SI 2008/409 Sch 1).

Format 1 opens with turnover, cost of sales, gross profit or loss, distribution costs, administrative expenses and other operating income, and suits a trading company that tracks the direct cost of what it sells. Format 2 opens with turnover, the change in stocks of finished goods and work in progress, own work capitalised, other operating income, raw materials and consumables, other external charges, staff costs, and depreciation and other amounts written off fixed assets. It suits a property or service company whose costs are easier to group by type. Both formats go on to investment income, interest, tax and the profit or loss for the financial year. Paragraph 1A of Schedule 1 also lets a company with its members' consent combine the opening items, including other operating income, into one "gross profit or loss" line (SI 2008/409 Sch 1 para 1A). HMRC receives the profit and loss account in every case, but section 444(1) lets a small company leave it out of the copy delivered to Companies House (CA 2006 s.444). From April 2028 small companies must file it, with an option not to publish it.

What does a worked Format 1 small company balance sheet look like?

Taxley's worked example shows a Format 1 balance sheet for Example Joinery Ltd, a fictional workshop company, at 31 March 2026, with last year's figures beside it. It is an illustration of layout, not a template for filing: every figure is invented and rounded, and the Roman-numeral items follow Schedule 1 (SI 2008/409 Sch 1).

Example Joinery Ltd's financial year ran from 1 April 2025 to 31 March 2026, so it began before 6 April 2025 and the earlier limits apply. GOV.UK gives those as turnover of no more than £10.2 million, a balance sheet total of no more than £5.1 million and no more than 50 employees for a small company, and £632,000, £316,000 and 10 employees for a micro-entity (GOV.UK: Preparing and filing Companies House accounts). The example company has turnover of £1.8 million, total assets of £900,000 and 14 employees, and the same was true the year before. It is above every micro-entity limit and inside every small company limit, so it prepares Section 1A accounts. Prepayments sit inside debtors and accruals inside creditors, positions the formats allow, and headings with nothing in either year, such as called-up share capital not paid, are left out.

The fixed asset movements note behind the £240,000 of tangible assets would read as follows.

Three checks in Taxley's worked example apply to any small company balance sheet. First, the movements note must agree to both balance sheets: cost of £370,000 less depreciation of £130,000 gives the £240,000 closing net book value, and £300,000 less £100,000 gives last year's £200,000, as paragraph 48 of Schedule 1 expects (SI 2008/409 Sch 1 para 48). Second, the £135,000 rise in the profit and loss account reserve equals the illustrative profit after tax of £175,000 less dividends of £40,000, a dividend figure that Section 1A encourages for this period and requires for periods beginning on or after 1 January 2026. Third, the balance sheet total used for the size test is the total of the assets, £240,000 plus £660,000, not the net assets figure. If the company had a bank loan secured on its machinery, the secured amount inside creditors would also need a note under paragraph 55.

Which notes must small company accounts include by law?

By law, small company accounts need an accounting policies note and the average number of employees every year, plus a note for each item the company has, such as fixed assets, secured debts, guarantees, directors' advances, post balance sheet events and related party transactions not on market terms (SI 2008/409 Sch 1 Part 3).

The table lists each note the law requires of a small company that is not using the micro-entity rules.

Only two notes in the legal list apply to every small company: the accounting policies note under paragraph 44 of Schedule 1 and the average number of employees under section 411(1) of the Companies Act 2006. The others apply when the company has the item. Paragraph 66 requires particulars of related party transactions that are material and "have not been concluded under normal market conditions" with owners holding a participating interest, companies the company has a participating interest in, and the directors (SI 2008/409 Sch 1 para 66). Paragraph 65 applies only to a subsidiary, which names the parent of the smallest group that draws up group accounts. Section 410A asks a small company for the nature and business purpose of arrangements kept off the balance sheet, but section 410A(4) excuses it from giving their financial impact (CA 2006 s.410A). Section 413(7) covers every director's advance that existed at any time in the year, even one repaid before the year end. Example wording for the policies, directors' advances and commitments notes is in the accounting policies and notes guide.

What extra notes does FRS 102 Section 1A require from 2026?

For accounting periods beginning on or after 1 January 2026, FRS 102 Section 1A's Appendix C adds notes the law doesn't require, including an explicit statement of compliance, going concern, all material related party transactions, and dividends declared and paid or payable. For earlier periods, FRS 102 only encouraged most of these (FRC).

The table compares what FRS 102 Section 1A asks for, by the date the accounting period began.

The Financial Reporting Council's periodic review amendments to FRS 102 take effect for periods beginning on or after 1 January 2026, and early application is permitted (FRC). The September 2024 edition expands Appendix C, the list for UK small entities, and confines the encouraged list, Appendix E, to Irish small entities (FRS 102, September 2024). Paragraph 1AC.2C, on going concern, asks a company to say that the accounts are prepared on a going concern basis, confirm that management has considered information about the future, and disclose any material uncertainties. Appendix C also adds notes on current and deferred tax, leases, provisions and contingencies, share-based payments and revenue from contracts with customers. FRS 102 lets a small entity omit such a disclosure when it isn't material, unless the law requires it. For earlier periods, section 393(1) of the Companies Act 2006 still bars directors from approving accounts that don't give a true and fair view (CA 2006 s.393), so a material going concern uncertainty belongs in the notes. The FRS 102 changes guide covers the 2026 amendments in full.

Does a small company need a directors' report?

Yes. Every company that isn't a micro-entity must prepare a directors' report for each financial year, so a small company prepares one for its members. It doesn't have to deliver the report to Companies House: section 444 lets a small company file only the balance sheet and its notes (CA 2006 s.415).

A small company's directors' report can be short. Section 416(1) of the Companies Act 2006 requires the names of everyone who was a director at any time in the financial year, and section 416(3) drops the recommended dividend for a company entitled to the small companies exemption (CA 2006 s.416). Schedule 5 to SI 2008/409 adds political donations and political expenditure, which must be disclosed when together they exceed £2,000 in the financial year (SI 2008/409 Sch 5). The board approves the report, and a director or the company secretary signs it. When the report uses the small companies exemption, section 419(2) requires a statement to that effect in a prominent position above the signature. A small company doesn't prepare a strategic report, because section 414B gives it the small companies exemption. If the directors don't file the directors' report or the profit and loss account, the balance sheet filed at Companies House must state that the accounts and reports are delivered under the small companies regime (CA 2006 s.444).

How are small company accounts approved and signed?

The board of directors approves the accounts and a director signs the balance sheet on the board's behalf. Above the signature, the balance sheet states that the accounts are prepared under the small companies regime and gives the audit exemption statements, and the Companies House copy names the director who signed (CA 2006 s.414).

Section 414(3)(b) of the Companies Act 2006 requires a statement, in a prominent position above the signature, that the accounts have been prepared in accordance with the provisions applicable to companies subject to the small companies regime. A small company is exempt from audit under section 477, and section 475 requires the balance sheet to carry the directors' statements that go with the exemption: that the company is entitled to it, that the members have not required an audit under section 476, and that the directors acknowledge their responsibilities for accounting records and preparing accounts (CA 2006 s.475). These statements also sit above the signature. The copy filed at Companies House needs more: section 444(5A) requires the balance sheet to disclose that the profit and loss account isn't delivered when it is left out, and section 444(6) requires the copy to state the name of the director who signed it. The directors must be satisfied that the accounts give a true and fair view before approving them, under section 393(1).

How do you check your small company accounts are complete?

Small company accounts are complete when the balance sheet follows a Schedule 1 format, every note the law requires is present for each item the company has, the FRS 102 Section 1A notes for its period are added, the directors' report is prepared, and the signed statements sit above the director's signature (GOV.UK: Preparing and filing Companies House accounts).

How to check your small company accounts are complete:

1. Confirm the company is small but not a micro-entity
2. Check the balance sheet follows Format 1 or Format 2
3. Match the fixed asset movements note to both balance sheets
4. Tick off every legally required note that applies
5. Add the FRS 102 Section 1A notes for your period's start date
6. Prepare the directors' report naming every director in the year
7. Print the small companies and audit statements above the signature
8. Decide which copy goes to Companies House and to HMRC

How does Taxley prepare FRS 102 Section 1A accounts?

Taxley (taxley.co.uk), UK online software that prepares and files the Company Tax Return (CT600) with HMRC and the annual accounts with Companies House, prepares FRS 102 Section 1A accounts in iXBRL with the CT600 for £84.50 (promotion price until 31 Dec 2026; £169.00 from 1 Jan 2027). It files the Companies House copy without the profit and loss account (GOV.UK: Company authentication codes for online filing).

Taxley's small company accounts contain an income statement in Format 1 for a trading company or Format 2 for a property or mixed business, a Format 1 balance sheet with last year's figures, the section 477 audit exemption, section 476, directors' responsibilities and small companies regime statements, and the board's approval date and signing director. The notes are an accounting policies note, which Taxley drafts from the business type for you to edit; the average number of employees; a statement that the accounts follow FRS 102 Section 1A; a movement note for tangible fixed assets or investment property, built from the two balance sheets, when last year's figures are in the accounts or it is the company's first period; and, when the figures reconcile, a reserves note showing the profit and loss reserve moving from the start to the end of the year, with dividends paid. Notes you write are printed word for word: secured debts, advances and guarantees to directors, financial commitments and contingencies, government grants and additional information (CA 2006 s.413). Investment property at fair value is supported. An abridged tick-box adds the members' consent statement, but the accounts keep the same lines as full accounts.

Taxley doesn't prepare a directors' report, which a small company must still prepare for its members, and it has no dedicated related party, going concern, post balance sheet event, parent undertaking or off-balance sheet note. The additional information note prints your own wording, unchecked. Intangible assets and fixed asset investments get no movement note (SI 2008/409 Sch 1 para 48). A company with related party transactions, a going concern doubt or a parent company words those disclosures itself in the additional information note; do I need an accountant? lists what else Taxley doesn't cover.

The Companies House copy leaves out the income statement and the reserves note, and says the directors have elected not to deliver the profit and loss account. Once the return is paid and the accounts are finished, you press "File accounts at Companies House" and Taxley files that copy at no extra cost, using the company's authentication code, as it has since 28 September 2026. It doesn't file the confirmation statement, and it doesn't give tax advice. To see whether your company fits, take the 30-second check to see whether Taxley fits your company, or see what the small company software guide compares.

Frequently asked questions

Can a small company revalue its fixed assets?

Yes. Paragraph 32 of Schedule 1 to SI 2008/409 lets a small company show tangible fixed assets at market value or current cost, and paragraph 39 allows investment property at fair value. The notes must then give the valuation details, and paragraph 54 asks for the revaluation reserve movements.

Must a small company file its profit and loss account in 2026?

No. Section 444(1) of the Companies Act 2006 requires only the balance sheet, so the profit and loss account and directors' report are optional at Companies House. HMRC still receives the full accounts. From April 2028, small companies must file the profit and loss account but can opt out of publishing it.

Are small company accounts audited?

Usually not. Section 477 of the Companies Act 2006 exempts a small company from audit, unless members holding at least 10% of the shares require one under section 476. The balance sheet must still carry the audit exemption statements above the director's signature.

Can small company accounts use FRS 105 instead?

Only if the company also meets the micro-entity limits. For periods beginning on or after 6 April 2025, that means two of: turnover up to £1 million, a balance sheet total up to £500,000 and no more than 10 employees. Otherwise the company uses FRS 102 Section 1A.

Is a small company's directors' report public?

Only if the company files it. GOV.UK says small companies can choose whether to send the directors' report and the profit and loss account to Companies House, and the register is public. A report prepared only for the members stays off the register, but the balance sheet must then carry the section 444(5) statement.

This guide describes the Companies Act 2006, SI 2008/409 and FRS 102 Section 1A as checked on 30 September 2026. It is not advice for a particular company, and the worked example is an illustration, not a template for filing.