The compliance with accounting standards note is a short statement that the accounts follow the right accounting standard. Tax Optimiser fills in the standard wording for you, so in most cases you only need to check it is there.
What this note shows
The note tells the reader which framework the accounts are prepared under. FRS 102 Section 1A encourages small companies to include a statement of compliance with the standard, and it is standard practice in small company accounts. If the company has departed from the standard in a significant way, the note is where you say so.
The note only exists in FRS 102 Section 1A accounts. FRS 105 micro-entity accounts don't have it (see FRS 105 vs FRS 102 Section 1A).
Where the wording comes from
There are no figures in this note. The text is set up for you. The first time the accounts load, Tax Optimiser puts in this wording and switches the note on:
The financial statements have been prepared in accordance with the Financial Reporting Standard 102 Section 1A Small Entities. There were no significant departures from that standard.
Once saved, the wording is stored with the period, and any edits you make are kept.
Completing the note in Tax Optimiser
Open the period, choose View Accounts, then Notes in the Actions menu on the left. Select Compliance with Accounting Standards. The text box shows the current wording and Show this note in the accounts is already set to Yes.
Leave the wording as it is unless the company has departed from FRS 102. If it has, change the second sentence to describe the departure, the reason for it and its effect on the accounts. Click Save changes to save the note and rebuild the accounts preview.
There are no wording templates for this note. If you need the standard wording again, copy it from the box above.
How it appears in the accounts
The note prints as plain text under its heading. In the demo accounts it is note 2, straight after the statutory information.
Frequently asked questions
Do small companies need a statement of compliance with FRS 102?
FRS 102 Section 1A encourages small companies to include one rather than strictly requiring it. Almost all small company accounts do include it, and Tax Optimiser adds it for you.
Why is this note switched on when I didn't turn it on?
Notes with default wording switch on with that wording the first time the accounts load. You can set Show this note in the accounts to No if you really don't want it.
What counts as a significant departure from FRS 102?
A departure is where the accounts don't follow a requirement of the standard, usually because following it would not give a true and fair view. This is rare in small company accounts. If it applies, describe the departure, the reason and the financial effect.
Where do I say the accounts are prepared on a going concern basis?
In the accounting policies, not in this note. See the accounting policies article.
Where to go next
- Guide to the notes to the accounts – how the Notes screen works
- Previous: Statutory information note
- Next: Turnover note
- Statutory accounts: FRS 105 vs FRS 102 Section 1A
- Notes in FRS 102 Section 1A accounts