I have created below a simple table explaining the applicable frameworks:
| Company type | Accounting framework |
| Micro company | FRS 105 |
| Small Companies | Section 1A Small Entities of FRS 102 |
| All others | FRS 102 |
| Listed Companies | IFRS |
To qualify as a micro-entity or a small company for accounting periods beginning on or after 6 April 2025, a company must meet at least two of the following three criteria’s:
| Micro Company | Small Company | |
| Turnover | Not more than £1 million. | Not more than £15 million |
| Balance sheet total | Not more than £500,000. | Not more than £7.5 million. |
| Average number of employees | Not more than 10 employees. | Not more than 50 employees. |
A company qualifies as micro, small or medium-sized if it meets the size limits in its first financial year and retains that status until it exceeds them in two consecutive years.
Where an entity prepares its financial statements in accordance with an accounting framework, a statement of compliance needs to be included in the notes.
Bonus:
- A parent company may qualify as a micro-entity for its individual accounts only if it meets the micro-entity criteria itself and the group it heads qualifies as small. A parent company that prepares group accounts is not eligible to qualify as a micro-entity.
- A company that is not a parent but whose accounts are included in consolidated group accounts is not entitled to apply the micro-entities regime in it is individual accounts. Thus, UK subsidiary of an overseas parent will need to use FRS 102 (1A if small).
Sources:
Choosing the right regime | Small and micro-entity reporting | ICAEW
