If you’re not familiar with accounting, understanding different types of financial statements like full set of accounts, filleted accounts, and abridged accounts can be quite perplexing…!
In the past, small companies had the choice to opt for abbreviated accounts, which they could submit to Companies House with fewer disclosures.
However, as of January 2015, a full set of accounts or abridged set must be prepared for the company’s members and/or shareholders and the public record. These accounts are then “modified” or “filleted” before being filed at Companies House, removing certain information from the public domain.
The company and all its shareholders must make the decision regarding the abridgment of their accounts during the preparation stage. In the past, a company would first prepare full accounts for its members and subsequently decide whether to abbreviate them for the public record.
Full set of accounts
A full set of accounts refers to comprehensive financial statements that provide a detailed overview of a company’s financial position, performance, and cash flows. These accounts typically include a balance sheet, income statement, cash flow statement, and accompanying notes. They present a comprehensive picture of the company’s financial activities, enabling stakeholders to analyse and evaluate its financial health and performance. Full sets of accounts are prepared in accordance with accounting standards and regulatory requirements and provide transparency and disclosure of relevant financial information. At Dafferns, our policy is to exclusively provide clients with comprehensive sets of accounts, a decision we have adhered to since our early days.
Filleted accounts refer to financial statements that have undergone a process of modification or reduction before being filed with Companies House. The purpose of filleting accounts is to remove certain information or disclosures that are not required to be publicly available. This process results in a more streamlined version of the financial statements, providing essential information while omitting certain details for public consumption.
Abridged accounts are a simplified rendition of a company’s financial statements that are submitted to Companies House. These accounts offer a concise overview of the company’s financial status, profitability, and cash flows, while containing fewer comprehensive details compared to full statutory accounts. If you wish to avoid disclosing the net profit of your company, you are required to submit abridged accounts. If accounts are abridged, it will be clearly indicated as such.
In both cases, whether you go down the full or abridged route, all the data and information go into the accounting software regardless.
If you have any questions or need any advice, please contact me.