FRS 102 User Guide

Income Statement

Balance Sheet

IFRS only codes

Some of the nominal codes that exist in the FRS 102 chart of accounts are present only to align the chart with the IFRS chart of accounts. These codes are clearly marked 'IFRS only' in the Nominal Description and/or the Chart Category, such as :

9325    IFRS ONLY Exchange differences on pension scheme obligation

You should not post any transactions within FRS 102 accounting periods to such nominal codes. If you do, the formats will usually print a warning message to alert you. For example:

Nominal codings to be aware of

Guidance notes

There are 'Guidance Notes' within certain nodes of the Statutory Database, which help the user understand the information that needs to be disclosed within the particular node:

Trigger questions

There are 'Trigger Questions' within certain nodes of the Statutory Database, enabling the user to mould the database and formats depending on how the questions are answered:

Check facilities

Built within the following nodes of the Statutory Database is a check facility, which ensures that the information disclosed in the database agrees to the trial balance:

• Profit and Loss Account / SOCI Notes - Turnover - Analysis of Turnover (by class and market)
• Profit and Loss Account / SOCI Notes - Turnover - Audit fees
• Profit and Loss Account / SOCI Notes - Taxation - Reconciliation of Tax Charge
• Profit and Loss Account / SOCI Notes - Dividends - Ordinary Shares - Final and Interim Dividends
• Profit and Loss Account / SOCI Notes - Dividends - Preference Shares - Final and Interim Dividends
• Profit and Loss Account / SOCI Notes - Impairments - Analysis of Impairments 
• Profit and Loss Account / SOCI Notes - Impairments - Analysis of Reversal of Previous Impairments
• Balance Sheet / SOFP Notes – Tangible Fixed Assets  - Land and buildings
• Balance Sheet / SOFP Notes – Fixed Asset Investments - Movements
• Balance Sheet / SOFP Notes - Finance Lease Receivables - Minimum Lease Payments and Present Value
• Balance Sheet / SOFP Notes - Financial Instruments - Analysis
• Balance Sheet / SOFP Notes - Finance Lease Obligations - Future Lease Payments
• Balance Sheet / SOFP Notes - Deferred Tax - Deferred Tax Balances and Movements
• Balance Sheet / SOFP Notes - Retirement Benefit Schemes - Defined Benefit Schemes - Obligation Split (see example at end of list)
• Balance Sheet / SOFP Notes - Retirement Benefit Schemes - Defined Benefit Schemes – Fair Value of Scheme Assets
• Balance Sheet / SOFP Notes - Share Capital - Ordinary and Preference

Spare notes

Within the FRS 102 Master Pack, it is possible in CCH Accounts Production to trigger a spare note to print by populating the Header and Text within the Statutory Database. This approach has been implemented on the following areas within the Statutory Database:

• Critical Accounting Estimates
• Profit and Loss Account / SOCI Notes
• Balance Sheet / SOFP Notes
• Other Notes
  

In total there are 26 Spare Notes across the database. 

Client preferences

The Client Preferences node offers a series of questions to help you tailor the accounts (partial example shown):

Defective financial statements

An option under Client preferences permits the user to identify the current financial statements as a revised version of a previously published set of financial statements. 

Voluntary revision of accounts and reports by the directors under s454 of the Companies Act 2006 is only permissible if the accounts previously approved are defective – ie, where they failed to comply with the requirements of the Companies Act 2006 (including relevant accounting standards), or, where applicable, Article 4 of the IAS Regulation (for periods commencing before 1 January 2021).

Where the original accounts or report(s) are defective, and the directors elect to revise them under s454 of the Companies Act 2006, they may do so by:
- Supplementary note (ie a note explaining the corrections required); or
- Replacement (ie a corrected set of financial statements or reports).

The formats support revision by supplementary note and where the user chooses to identify the current financial statements as revised:
- Note 118 provides the declarations and information required; and
- The audit report is amended to refer to the revised financial statements.

Note that a company revising its accounts by replacement must file the full revised accounts and auditor’s report thereon (if applicable). No "filleting" of small company accounts is permitted.

Compliance terminology

Within the FRS 102 Master Pack, it is possible to specify the terminology you wish to use at client level.

• Use IFRS terminology within the notes - This option will use IFRS terminology throughout the financial statements, both in the primary statements and notes, eg instead of seeing Stocks you will see Inventories
• Use Companies Act terminology - This option will use Companies Act terminology throughout the financial statements, both in the primary statements and notes, eg instead of seeing Inventories you will see Stocks
• Use Companies Act terminology except for Primary Headers - This option will use Companies Act terminology throughout the financial statements, both in the primary statements and notes, eg instead of seeing Inventories you will see Stocks. The only change is that the header for Profit and Loss Account and Balance Sheet will change to Income Statement and Statement of Financial Position.

More detail on how to use, edit and control the Compliance Terminology function is contained in Appendix 5.

Compliance terms lookup

A user who does not have the Task Permission to access the Compliance Terminology maintenance screen may easily check the list of available terms while editing a format by selecting the 'Compliance Terms' action on the task bar:

Classic mode:

Ribbon mode:

Commands
There are commands within the formats that allow users to reference the Compliance Terminology:

• =AP("#Term1") - This is used within the body of a format or within a paragraph.
• =AP("#TermH1") - This is used within the header of a format. (It is the same value as #Term1, the "H" informs the application that the command has been used in the Header of the format)
• =AP("#CustomTerm") - May be added by users if required.

Note the capitalisation rules:

=AP("#term31") = Tangible assets (first letter is capitalised)

=AP("#Term31") = Tangible Assets (capitalises first letter of each word)

=AP("#tERM31")= tangible assets (lower case)

=AP("#TERM31")= TANGIBLE ASSETS (upper case)

Standard text

There is a table of standard text used throughout the financial statements, and these can be amended at practice level by accessing the Maintenance > Word items menu. Some of these alternative words are set out within the auditor/accountant section below, and a further key term is:

#aw3: 'Accounts' vs 'Financial statements'  The default description used in this pack is "financial statements" and this has been used in the formats.  However, the wording can be changed within Word items.

Companies limited by guarantee

The master pack supports the generation of accounts for Companies Limited by Guarantee (CLG), incorporated in either the United Kingdom or the Republic of Ireland. Please see Appendix 3 for more detailed guidance.

Note that where the user has chosen the CLG option, a further question will appear, asking whether the company is non-profit (the default) or is run for profit. A CLG run for profit will have very few accounting differences compared with a company that has share capital.

Implementation of Reduced Disclosure Framework

If the company for which you are preparing FRS 102 accounts is a qualifying entity (broadly speaking, a subsidiary of a parent company that reports under FRS 102), it is possible to take some exemptions from certain disclosures (for example exemption from cash flow). Simply select the Yes option:

Once 'Yes' has been selected, further questions will appear, eg 'Include Cash Flow' (not required under the Reduced Disclosure Framework, but it can be optionally disclosed), 'Disclosure of Financial Instruments'. Additionally, areas that are optional fields to be disclosed are now identified with a 'blue no-entry' symbol throughout the Statutory Database.

Audit exemption

It is possible to specify whether the client is exempt from audit.

Type of Accountants’ Report

The user can choose either a standard accountants’ compilation report or an assurance review report:

Users have a choice between generic assurance review report text in accordance with the ISRE 2400 (Revised) and extended text provided by the ICAEW.

Size of entity

A Statutory Database node gives an indication of the size of the data (based on the Companies Act thresholds) and whether the job qualifies for an audit. This node is for information purposes only and will not directly affect any of the data settings or selections.

The node will display the relevant company size thresholds for either UK or Ireland country of incorporation. Turnover will be apportioned if the accounting period is either short or long.

The calculated result is for advisory purposes only and the user should always perform an independent calculation. Once the user has decided whether the company qualifies as Small, Medium or Large, this decision is recorded in the Size of Entity node (#size1):

Newly created FRS102 jobs are assumed to be large by default, to avoid any risk of under-disclosure.

If the system detects any invalid combinations set within the Client Preferences area, then warning messages will be displayed. For example if the Size of Entity is set to large but the Small Companies Exemptions Section 1A is set to Yes, then the warning below will be displayed on the Size Grid:

FRS 102 Section 1A - Small companies exemptions

The small entities regime (Section 1A of the FRS102 legislation) is available to companies which qualify as a small entity. It allows the accounts to benefit from a series of reporting exemptions. If these exemptions are applied, then many of the formats will no longer be included in the print, and others will become less detailed. Further details are included in Appendix 2 and Appendix 8. 

Small companies not applying Section 1A

If a small company chooses not to apply Section 1A, or cannot do so if it is a subsidiary of an ineligible group (eg where one of the members of the group is a Plc), it is still exempt from the requirement to include a Strategic Report and Cash Flow within its own accounts. The system will assume that the user wishes to apply these exemptions, and those formats will be suppressed. It will also trigger an extra bullet point in the Audit Report Matters section and supresses other references to the Strategic Report. However, if the user wishes not to take this exemption, overrides are available, eg to include the cash flow or strategic report:

Note that small companies that do not apply Section 1A are still able to file 'filleted' accounts with Companies House.

Dormant companies

To indicate that job is Dormant, open the General screen within the Statutory Database. Select the Dormant drop down and change the default value from 'Trading' to either 'Dormant – Never Traded' or 'Dormant – Ceased Trading' as required. Click the Apply button and the rest of the statutory database will be refreshed to trigger the correct disclosures for dormant companies. Please see Appendix 4 for more information.

Auditor's or accountant's reports

Turnover

Within the Statutory Database: Profit and Loss / SOCI Notes > Turnover > Analysis of Turnover, it is important that the user populates the grid with the categories of turnover, even if there is only 1 category of turnover. This information is then used to populate the Turnover note. The information is not taken from the nominal ledger (nominal codes 0001 - 049Z).

For the geographical analysis, it is not necessary to state the market if there is only one (material) market. Therefore within the Statutory Database: Profit and Loss / SOCI Notes > Turnover > Only One Geographical Market, the user can choose to suppress the geographical analysis entirely. If this is not suppressed, a grid for entry of the market analysis will be shown.

Dividends

There are only 4 nominal codes to post to:

• 5001 - Ordinary dividends final paid
• 5002 - Ordinary dividends interim paid
• 5003 - Preference dividends final due or paid
• 5004 - Preference dividends interim paid

All analysis work is done within the Statutory Database, eg: Profit and Loss Account / SOCI Notes > Dividends > Ordinary/Preference Shares > Final/Interim Dividends

Deferred tax

There are only 3 areas to post to:

• 9400-940Z Deferred tax liability balances not offset (one code for each jurisdiction)
• 9410-941Z Deferred tax asset balances not offset (one code for each jurisdiction)
• 9420-944Z Spare codes (currently treated as asset balances)

If balances can be offset, then they should be entered in the same range. For instance, if there is a liability for £300,000 and a separate asset of £100,000 which can be offset, they should be entered (say) as 9400 £300,000 Cr and 9401 £100,000 Dr. If asset and liability balances cannot be offset and must be disclosed separately under IAS 12, they are entered in the separate asset and liability ranges. All analysis work is done within the Statutory Database: Balance Sheet / SOFP Notes > Deferred Tax:

There is one grid (Deferred Tax Headings) that permits the amendment of the standard category descriptions for the breakdown of the balances, and the closing balances (assets and liabilities):

A second grid (Deferred Tax Movements) permits entry of total movements during the year. Both grids have checks built in to show differences from the nominal balances.

Presentation of restatements

Any restatements that are disclosed upon the correction of prior period errors or adoption of the FRS 102 standards may be presented in the accounts in three possible ways:

• A summarised 'list' of the restatements
• A detailed breakdown of the movements resulting from the restatements
• Both of the above

The default presentation used is the 'list' option, but this may be altered in the Statutory Database screen, eg:

An example of the reconciliation of equity note when using 'list mode' is shown below:

An example of the same note when using 'movements mode' is shown below:

An explanation of the transition entries to be made is set out in the Transition to FRS 102 section. An explanation of the entries to be made for prior period error adjustments and their interaction with transition adjustments is set out in the Prior Period Errors section.

Options

FRS 102 permits three options:

• Three separate statements: income statement; statement of comprehensive income; statement of changes in equity.
• The first two can be combined into a single statement of comprehensive income, with a separate statement for changes in equity.
• The three can also be combined into a statement of income and retained earnings.

In the Master Pack, the default is the first option (show all three statements). The second and third options can be chosen in the statutory database under the 'Profit and Loss Account' heading. For each option, the statutory database displays guidance taken from FRS 102.

The third option is permitted only where there are no movements on other comprehensive income and the only changes to equity for all periods presented arise from profit or loss, payment of dividends, corrections of prior period material errors, and changes in accounting policy.

Titles applied

Compliance terminology options are available for the 'Income statement'. However, where a combined statement has been chosen (options 2 & 3 above), the titles used for the formats default to the specific FRS 102 names 'Statement of comprehensive income' and 'Statement of income and retained earnings'.

Within the analysis in the statement of comprehensive income, users can choose to refer to comprehensive "expense" or "loss" where relevant (note however that this is optional and most businesses will not apply this wording). The wording for this is amendable and is included as an option in the income statement section.

Format II Profit & Loss

If you wish to present the Income Statement using the Format II layout, this can be done by setting the option in the Statutory Database as shown below:

Other options

• The Income Statement can show the full detail required in Format I for Investment Income and Interest Payable, or alternatively it can show the total, with the breakdown shown in the note.
• Other Comprehensive Income items can either be shown net of tax, or else gross with a separate tax line. The statutory database option chosen discloses on the face of the statement the approach taken.
• The existence of prior period adjustments can be flagged. An explanation of the entries to be made for prior period error adjustments and their interaction with transition adjustments is set out in the section on prior period adjustments below.
• The existence of discontinued operations can be flagged, triggering grids to show the headings and adjustments required. The income statement that results is displayed in a landscape format, showing separate columns for continuing and discontinued activities.
• For dormant companies with no income or expenditure, there is an option to either have no Income Statement or else include a statement that there was no income or expenditure.
• The user can choose to include a statement that all operations are continuing.
• Together with the other primary statements, there is an option to include the message  'The notes on pages X to Y form part of these financial statements.'

Using 8 point font

A flag in the statutory database enables the user to choose to show the SOCIE table in the smaller 8 point font (vs the normal 9.5 point). This is particularly useful where:

• The number of reserve types is causing the page to be shown as landscape when with a smaller font it could be shown in portrait mode; or
• The number of reserves are so great that the columns cannot even fit onto a landscape page; or
• The number of rows is causing the SOCIE to break over multiple pages.

Splitting other movements

Most reserves (plus share capital) have codes for 'other movements' on the reserve. Where there is only one cause for such movements, this can be shown and described easily on the SOCIE by using the amendable line description #soc1 (which defaults to 'Other movements').

Where there are multiple causes for movements, they can be split out using a table in the statutory database 'Analysis of other movements'. This enables the user to analyse a maximum of 6 specified movements across all 11 reserves. 

Non-distributable retained profits

There is no requirement in FRS 102 or the Companies Act to split the retained profits between distributable and non-distributable elements. However, many clients wish to show this. The Master Pack permits this.

Nominal chart entries

The user makes contra adjustments between the following nominal codes:

The range 9900..9909 remains the full retained profits range, with 9906..9908 set up as a range for recording the non-distributable element. 9907 and 9908 close off to 9906 Non distributable retained earnings b/fwd.

9902 / 9908 would normally be used once, to transfer the non-distributable profits to date. From that point onwards, the current year profits or losses would be transferred.

As an example, the current year might commence with the balances:

This might include £20,000 non-distributable profits. The journal needed to separate this out is:

If the profits during the year included a further £3,000 non-distributable, then:

At the end of the year, non-distributable profits of £23,000 are shown, and these roll forward into 9906.

Statutory database options

There is an option within the balance sheet presentation area which allows the user to choose between:

• a simple analysis within the main retained profits note (this is the default)
• a split throughout the formats, affecting balance sheet, statement of changes in equity, retained profits and a separate non-distributable reserve note. This effectively treats the balance as a separate reserve rather than an sub-analysis of the retained profits. 

There are further options enabling users to apply their own wordings for the headings and descriptions, including on the balance sheet and statement of changes in equity. Some of these options are shown below:

… and also in the notes:

Formats

The statement of cash flows has the following characteristics:

• The statement uses the indirect method.
• The starting point of the main cash flow statement is a line for cash generated from/absorbed by operations, referenced to a separate note that shows the adjustments made to profit to arrive at this figure.
• The analysis of cash and cash equivalents is shown at the end of the cash statement.
• A separate note shows the analysis of movements on net debt.

Statutory database

The following adjustments are available within the statutory database:

• to permit the option within FRS 102 to show certain movements either within operating activities, financing activities or investing activities;
• to gross up any net movements on financing activities and investing activities;
• to identify non-cash movements;
• to allocate interest received and other gains between loans and other financial assets;
• to reallocate interest paid that has been rolled up into borrowings;
• to allocate dividends paid that have been credited to directors' loan accounts;
• to reflect finance lease additions;
• to identify the amounts included within current asset investments that should be treated as cash equivalents; 
• to enter roundings adjustments, as follows:

Multiple worksheets in a format

It is possible in CCH Accounts Production to add multiple worksheets to a format, and to trigger the printing of each worksheet based on a test condition. There is a group of actions displayed on the task bar when editing a format:

The use of multiple worksheets is particularly relevant where the number of columns varies within the format. 

There are variations of the Attach command available to control the printing of multiple worksheets within a Format:
1) relative worksheet reference: =AP("*Attach*,@Sheet3,(f1=f1)")  - Attaches from current format the worksheet named 'Sheet3'.
2) indirect format reference: =AP("*Attach*,page4dir,(f1=f1)") - Attaches all worksheets within the attached format.
3) indirect worksheet reference: =AP("*Attach*,page4dir@Sheet3,(f1=f1)") - Attaches from format 'page4dir' the worksheet named 'Sheet3'.

Page orientation

When editing a format, in the Page Setup screen there is an option for orientation called 'Autodetect'.

If Autodetect is selected, when the format is previewed, CCH Accounts Production will calculate the required width of the content to be printed. If it can fit onto a portrait A4 page, the preview will automatically show as portrait. If the content is too wide, the orientation will be automatically switched to landscape.

Set Title Rows - the ability to 'repeat rows' at top of A4 page

If a page or note spans more than one page, it is possible to designate rows to repeat at the top of the new page. For example you may have a management page or a tangible fixed asset note that goes on to two pages and you wish to repeat the same 'heading' rows on the second page.
There are two options:

• Title rows are applicable when you want certain rows to repeat for the whole of the note or page. This is less common.
• Subtitle rows allow you to also designate where you want them to stop being applied. This is relevant to formats using multiple tabs and to formats where you want a long numerical section to repeat the headings but do not want headings repeated for text below that, if it spills over the page.

The approach for both is the same as follows, except that for subtitles is it possible to mark the end row where you want the subtitles to stop repeating. To use this function, open the page or note and select Draft Mode. Highlight the rows you wish to repeat, right click and select 'Set title rows…'. [Or 'Set subtitle rows']

This will display a small pop up window, showing the rows you have selected. To accept this, press 'Enter' to set the title rows.

Alternatively, click the  X  to cancel. A tooltip will be added to the cell to indicate the title rows:

To remove title rows once set, right click and select 'Set title rows…' again, and this time click the 'Clear' button in the pop up window:

For subtitle rows, highlight the last row you want titles to repeat on and choose 'Stop repeating subitle rows'.

Statutory ranges

It is possible in CCH Accounts Production to add/subtract statutory database fields and cross reference them in a format. Within Maintenance > Accounts > Statutory Ranges:

There is a new command within the formats that allows users to reference to a Statutory Range:
=APSTATRANGE("a","CAFL")
This command can be used on its own or within a print condition or with name ranges eg 
=AP("[a,*TOTREV]")-APSTATRANGE("a","DISOPREV")

Comparative statutory values

For example, the number of employees is contained in statutory item #on57. The following command would be used to pick up the prior year's figure:
=AP("b,#on57")

Within such commands you can reference to:

• a = Current accounting period.

  Please note =AP("#on57"), will also return the number of employees for the current accounting period and this is the default entry used in the CCH FRS 102 Master Pack.

• b = Comparative accounting period
• c = Pre-comparative accounting period (and so on)

This command can be used on its own or within a print condition or with name ranges.

Excel commands

Most standard Excel commands can be used, for instance =Sum, =Countif commands etc.

Column and row print conditions

For rows

All rows will print by default but can be suppressed either by:

• using the Data Regulation (DR) column to suppress non-zero lines; or
• the existence within column A of  AP("RS"), either on its own or as part of a formula.

For columns

All columns will print by default but can be suppressed by the existence in a suppressed row above the non-suppressed active section of:

• the command AP("CS"), either on its own or as part of a formula; or
• the specific AP("WC .....") formula that sets the column width to zero.

Warning messages

Warning messages will print within many formats where an error has been detected, for example: 

Statement of Changes in Equity (Page7soce) and various reserve notes - differences between b/wd and c/fwd values

The SOCIE page and the reserves notes include tests at the end of the formats for differences (a) between balances b/fwd for the prior year and the corresponding balance c/fwd in the pre-prior year and (b) between balances c/fwd at the end of each period and the calculated balances using the balances b/fwd adjusted for all movements shown on the format.

Tangible Assets (Note26) - Spare Nominal Codes and differences between b/wd and c/fwd values

Within the FRS 102 Master Pack there is space in the chart for tangible assets for codes 6530..669Z. These are earmarked for future development and should not be posted to within FRS 102. If these codes are posted to then they will appear within the total net book value column but not within the analysis. Therefore, if a user posts to these nominal codes a warning message will appear at the bottom of the Tangible Assets note advising the user to reconsider posting.

There is also a test which compares b/fwd values for cost and depreciation in the the current year against c/fwd values from the prior year.

Required amendments – retrospective restatement

For an entity with a date of transition of 1 January 2014, it is required to restate its balance sheet at 31 December 2013 by making the adjustments that are necessary to recognise and measure all assets and liabilities in accordance with FRS 102.
Paragraph 35.7 of FRS 102 requires an entity to:
(a) recognise all assets and liabilities whose recognition is required by FRS 102 (eg forward exchange contracts):
(b) not recognise items as assets or liabilities if FRS 102 does not permit their recognition:
(c) reclassify items (eg into different groupings in the cash flow statement): and
(d) restate certain assets and liabilities at a different value (eg financial instruments measured at amortised cost using the effective interest rate, which in some cases may vary from a previously used historical cost).

Paragraph 35.8 states that adjustments on transition shall be recognised in retained earnings, or where appropriate, another category within equity.

How to disclose the restatements

There is a 5 step process to follow when disclosing the restatements involved during the conversion to FRS 102:

1. Calculate the restatements required for prior year for the specific job.
2. Post a Restatement journal within CCH Accounts Production in the current year.
3. Analyse out the detail within the Statutory Database in the current year.
4. Reconcile the Transition Reconciliation format.
5. Make cash flow adjustments where required.

Calculate the restatements required

This step is done externally to CCH Accounts Production, and relies on your knowledge of the company and its financial affairs.

Posting restatement journals

Current Year -
Once you have identified the restatements that are relevant, you need to post a Restatement Journal into CCH Accounts Production within the current year.
Restatement journals are entered in the current year because they will affect the comparative year figures only when viewed in the current year financial statements: they will not be seen in the comparative year when that is opened directly. 

The cumulative effect of changes to the opening and closing balances should be posted. For example, if the value of investments is increased by £3,000 at the start of the comparative period (ie uplifted from the original closing balance of the pre-comparative period) and is then increased by a further £2,000 at the end of the comparative period, then the restatement journal line that affects the investments code should be the total of £5,000 – ie, the effect on the closing balance.

Prior Year - 
Where there are material transition changes to the prior year opening balances, you need to enter appropriate Restatement Journals also in the prior year (affecting the closing balances of the pre-prior year). This will ensure that the closing balances of the pre-prior year agree to the (adjusted) opening balances of the current year.

• Within the comparative year, enter a restatement journal for the transition adjustments relating to the closing balances of the pre-comparative year. This will affect the precomparative balances as seen in the current year. You only need to make a summary journal. You will need to check that your journal agrees to the opening balance element shown in the transition grid analysis noted below.

Command in the formats -

A new command has been created to return the balance of the Restatement Journals posted to a given nominal code or Name Range. This command is used in formats relating to the transition to FRS 102 in the new Master Pack. This new command has been added to CCH Master Formats as required and users do not need to edit their own formats.

The command uses the same notation as the existing Name Range total, but is prefixed by a ~ (tilde) character which tells CCH Accounts Production to only return the balances of any Restatement Journals entered. For example: =AP("~[b*,TO]")

Because the restatement journals by their nature affect the comparative period values, the new command requires you to enter period 'b' rather than 'a'.

Analysing the restatement balances in the statutory database

Paragraph 35.13 states that to comply with the disclosure of transition to FRS 102 an entity's first financial statements prepared using the FRS shall include:

• A description of the nature of each change in accounting policy.
• Reconciliations of its equity determined in accordance with its previous financial reporting framework to its equity determined in accordance with this FRS for both of the following dates:
• The date of transition to this FRS: and
• The end of the latest period presented in the entity's most recent annual financial statements determined in accordance with its previous financial reporting framework.
• A reconciliation of the profit or loss determined in accordance with its previous financial reporting framework for the latest period in the entity's most recent annual financial statements of its profit or loss determined in accordance with this FRS for the same period.

To cater for the above, within the General Node there is a flag 'Existence of Restatement Balances'. Once 'Yes' has been selected a further node is available 'Restatement Balances', within this node there are 4 options:

• Statement of Financial Position - Reconciliation of Equity
• Income Statement - Reconciliation of profit or loss for the year
• List of Changes to Equity
• Notes to the Reconciliation

The grid nodes allow you to enter or view the following information:

1. You can enter a free-text note number, for example 1 or (i) or '1, 2'. This will be used to cross reference to further narrative to support the restatement amount.
2. This read-only column will automatically display the total value of the restatement journals entered for each row.
3. Here you must fill in the split of the total restatement that applies to the pre-comparative period.
4. This read-only column will automatically calculate the split of the total restatement that applies to the comparative period.

Nine free text headings and paragraph nodes are also provided for you to input further narrative. There are columns further to the right for entry of prior period adjustments made at the same time - see Presentation of Restatements.

Format showing the restatement

This format is found in the Full Accounts collection within the Financial Statements, and is Note96 at the bottom of the list. The format displays the data entered in the Statutory Database and shows the effect of the transition adjustments on the major figures of the Balance Sheet and Income Statement.

Please check that you are satisfied with the detail disclosed on this format. The format may be presented in either a summarised 'list' view, or a more detailed 'movements' view, by selecting the required option in the Statutory Database. (See page 17 above for more details).

Effect on the cash flow statement

Where an entity requires a cash flow, the transition effects within the current period will be picked up automatically and there are no adjustments required. 

If however there are also changes to the prior year opening balances, the closing balances of the pre-comparative period will not reconcile to the restated opening balances unless you make a restatement journal for the transition adjustments relating to the opening balances of the comparative year. This will affect the pre-comparative balances as seen in the current year.

Amending the deferred taxation analysis

The deferred taxation note analyses movements for the current and prior years between the causes of deferred taxation. Where there are restatement journals affecting deferred tax balances, these need to be reflected in the statutory database analysis. This is best explained by an example. In the following, there is a restatement of deferred tax relating to investment property, which would pass through profit and loss.
The restatement journal was:
(3,000) Cr Deferred tax creditor (£2,000 opening balance, £1,000 closing)
1,000 Dr Deferred tax charge (affects prior year profit and loss)
2,000 Dr Retained profits (affects balance brought forward in prior year)

The following additional steps required are:

• Create a restatement journal in the prior year: £2,000 Cr Deferred tax, Dr Retained profit.
• In the pre-prior year (ie two years ago) open the statutory database grid for deferred tax movements and amend the closing balance line to show an additional £(2,000) creditor in the revaluation column. The grid will show that the balances are £2,000 'wrong' because that year cannot look forward to restatement journals made in the next year.
• In the prior year (ie one year ago) open the statutory database grid for deferred tax movements and (a) amend the movements in the revaluation column, with a £(1,000) credit in the Profit & loss charge row: (b) amend the closing balance to reflect the additional cumulative £(3,000) credit. The grid will show that the movements and closing balance are 'wrong' by £3,000 because that year cannot look forward to restatement journals made in the next year, though it will include the restatement made for the pre-prior year.
• The current year deferred tax movements grid and corresponding deferred tax note should now be correct (assuming it was reconciled correctly before starting this exercise).
• The tax rate reconciliation will also need to be amended. This is found in the current year statutory database under profit and loss notes. There is a one-line entry required at the top of the current year column, affecting the prior year.

Adjustment of 'prior period material errors' with no FRS 102 transition adjustment

In the following example, the current year end is 31/12/2015. A prior period adjustment needs to be made to accrued wages for the prior year.

1. Enter the adjustment to wages and the accrual as a restatement journal in the current year. Note: Restatement journals only affect the prior year as seen in the financial statements of the current year. They will not affect the prior year if you open that to view it or reprint the financial statements.


2. Enter also the corresponding adjustment to the current year opening balances, using a standard journal.

3. In the statutory database, confirm that a prior period adjustment exists (otherwise the system will assume that all the adjustments arise from transition)

4. If the prior period adjustment includes a material adjustment to the prior period OPENING balances, these should be entered as restatement journals in the PRIOR year. They will therefore amend the pre-prior period closing balances year, as viewed retrospectively in the financial statements of the current year. In the example above, if £1,000 of the £5,000 adjustment related to the prior year opening balances, the following changes would be made:

In the current year, the restatement journal would no longer be Cr 8085 / Dr 3000 for £5,000 since part of this is now related back to the pre-prior year. Instead we have:

• Cr 8085 accruals £5,000
• Dr 9900 retained profits b/fwd £1,000
• Dr 3000 wages £4,000

In the prior year, a restatement journal would be entered

• Cr 8085 accruals £1,000
• Dr 9900 retained profits b/fwd £1,000 OR (if you are showing more than two periods, eg if including a five year record) Dr 3000 Wages instead.

5. Check the statement of changes in equity for error messages These will appear if there is a mismatch between prior year closing and current year opening figures. The note will now refer to figures 'As restated'.

If you have chosen (where permissible) to have a combined statement of income and retained equity, this should show the information instead, as follows.

6. Choose the type of display you want to see. There are now the same choices for PYAs as for transition (see that section for details):

And now you can also choose whether to disclose the P&L movements:

7. If the list option has been chosen (on its own or with detailed movements), additional grids and text notes will become visible. These should be entered in the same way as for a transition, as set out in the following section.
8. Check the prior period adjustment note:

Adjustment of 'prior period material errors' together with a FRS 102 transition adjustment

In this example, the full adjustment is still £5,000 as before, but only £2,000 of that is a prior period adjustment and the remaining £3,000 is a transition adjustment. This is achieved in the software as follows.
1) Make the restatement journal adjustments as above, but then confirm also that FRS 102 restatement balances exist.

2) In the first transition grid, enter the PYA amounts in the columns set to the right of the transition adjustments. Before any entries are made, the software assumes that the full £5,000 is for transition. Once a prior period error adjustment is made (eg, £2,000 as below), the table is recalculated to allocate only the remaining £3,000 to transition.

3) Make the corresponding entry for the PYA element of the P&L charge.

4) If the 'List of changes' for transition is being used, the figures expected are automatically adjusted for PYA entries:

5) The Prior period error note is shown as before, with the revised figures (£2,000 instead of £5,000). The FRS 102 transition note is also displayed and shows the effect of the PYA:

6) Where the prior period adjustments materially affect the prior year opening balances, these are entered in the grid set out in (2) above.

Small Companies exemptions 

The small entities regime is available to companies which qualify as a small entity.

ROI companies
The reporting required under this regime is set out in: (1) Companies (Accounting) Act 2017, in conjunction with (2) Amendments to FRS 102 (July 2015).

UK companies
The reporting required under this regime is set out in: (1) Statutory Instrument 2015/980: The Companies, Partnerships and Groups (Accounts and Reports) Regulations 2015, in conjunction with (2) Amendments to FRS 102 (July 2015).

Override of disclosures
The legislation states that the accounts shall give a true and fair view, and therefore it may be necessary to provide disclosures which exceed the minimal requirements. On the other hand, for many disclosures it is not necessary to show amounts that are not material.  Therefore, the software allows the inclusion and exclusion of areas of the accounts. If a user wishes to include or exclude particular notes they can achieve this through the right-click Include or Exclude options in the Financial Statements screen. Within certain notes (eg tangible fixed assets) the user can choose to expand the disclosure by choosing an override flag within the statutory database node for that area.

Adoption in CCH Accounts Production Limited (FRS102) entity
To adopt Small Companies Exemptions in an FRS 102 master pack you must access General > Client Preferences within the Statutory Database and then select 'Yes' to Implementation of FRS 102 – Small Companies Exemption'. Once the radio button is set to Yes, the Small Companies Exemptions folder containing related options will become active.

Primary statements affected
Selecting Small Companies Exemptions will by default exclude the Statement of Comprehensive Income, Statement of Changes in Equity, the Strategic Report and the Cash Flow Statement. There are options within the Small Companies Exemptions folder to allow the user to override this exclusion and include the Statement of Comprehensive Income and/or the Statement of Changes in Equity. The existing option to Include Cash Flow, which also sits in Client Preferences, will have the effect of overriding the Small Companies Exemption and hence allow inclusion of a Cash Flow statement.

The Income statement and Balance sheet will be simplified to some extent and the Balance sheet will include a statement that the financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.       

Notes affected
The following notes will be suppressed entirely under the Small Companies Exemptions option. A user can right-click on the format in Financial Statements and choose to include it.

• Directors' remuneration (UK only, will still be included for Ireland)
• Other gains and losses
• Taxation
• Dividends
• Stocks
• Finance lease receivables
• Convertible loan notes (UK only, will still be included for Ireland)
• Deferred taxation
• Retirement Benefit schemes

Adopting Small Company exemptions will also trigger reduced disclosure in other notes to the accounts. The following notes are amended:

• Profit for the year 
• Employees
• Intangible fixed assets
• Tangible fixed assets
• Fixed asset investments
• Debtors
• Creditors
• Borrowings

A user can easily override the reduced disclosure and instead output the full note for Tangible fixed assets, Intangible fixed assets, Debtors and Creditors, by selecting the relevant option within the Statutory Database. For example:

Other changes include updates to the Accounting Policies (note that there are no reductions in disclosure), Contingent Liabilities note edited to include Financial Commitments and Guarantees, and the addition of a new note for Off Balance Sheet Arrangements.

Directors' report
For disclosures not required for small companies in the directors' report, the FRS 102 Master Pack will remove the default paragraphs and show a Blue icon in the Statutory Database to indicate it is an optional disclosure. A user may still select a paragraph from the drop down or edit the blank paragraph to disclose if they wish.

A statement has been added to the Directors’ Report advising that the report has been prepared in accordance with the special provisions relating to small companies within Part 15 of the Companies Act 2006.

Small Companies Regulations Abridged Accounts (UK only)

FRS 102 1A states that a small company shall present a statement of financial position, and its profit or loss for a period in an income statement, in accordance with the requirements set out in Part 1 General Rules and Formats of Schedule 1 to the Small Companies Regulations (as updated by The Companies, Partnerships and Groups (Accounts and Reports) Regulations 2015). This allows the preparers to either present the Profit and Loss accounts and Balance Sheet as per full FRS 102, draw up abridged versions or to adapt them. CCH Accounts Production provides an option in the Small Companies Exemption folder within the Statutory Database to prepare Abridged accounts.

Setting Abridged accounts to Yes will result in the financial statements including an abridged Profit and Loss Account, an abridged Balance Sheet and further reduced disclosure in the notes to the accounts. The Fixed assets notes will only show a column for total, however the override option will still allow the user to disclose the full note if required. The Debtors and creditors note will be suppressed.

Small Company Reduced Filing (UK)

The FRS 102 master pack offers a drop down selection on the Financial Statements screen that allows a user to select the option for Small Company Reduced Filing:

The following primary statements are suppressed:

• Directors’ Report
• Audit Report
• Profit & Loss account

The related Profit & Loss notes are also suppressed:

• Turnover
• Exceptional Items
• Operating Profit
• Auditors Remuneration
• Directors’ Remuneration
• Investment Income
• Interest Payable and Similar Charges
• Other Gains and Losses
• Taxation
• Discontinued Operations
• Dividends
• Impairments

The Contents page will supress the relevant rows. The Front Cover will display 'Pages for filing with Registrar'.

The Small Companies Filing Copy folder in the Statutory Database contains options to allow the user to include the Profit and Loss Account and Audit Report and/or Include the Directors’ Report if required:

An Audit Report Information note will output in the Small Companies Filing copy if the Audit Report has been excluded. It will state whether the Auditors’ Report is unqualified or qualified and also contains details about the auditors.

Small Company Reduced Filing/Small abridged accounts (Ireland)

A user preparing ROI accounts can claim the small size/abridgement exemption by selecting Small Company Reduced Filing Copy from the drop down in the Financial Statements page. Selecting the option will:

• Exclude the Directors’ Report
• Exclude the Profit and Loss Account
• Produce the Special Auditors’ Report for small companies
• Trigger Balance Sheet statement regarding size/abridgement exemption
• Include new Directors’ Interests note (if text entered in Statutory database paragraph)
• Update Cover page to state Abridged and Contents page to exclude pages.

There are overrides in the Statutory Database which allow the user to include the Directors’ Report and/or Profit and Loss account in the Filing copy.

The Companies Accounting Act 2017 enables qualifying Irish companies to apply Section 1A of FRS 102 (see Appendix 8) as well as introducing a number of other changes, eg the option to apply FRS 105. Medium abridged accounts are not permitted following the adoption of Companies Accounting Act 2017, and changes in the legislation for Small abridged accounts requires more disclosure, hence the inclusion of more notes to the accounts resulting in a larger set of small abridged accounts.

Key points

The key differences between a Company Limited by Guarantee and a normal Limited Company are as follows:

• Most companies that are guaranteed do not trade for profit: where this applies, the income statement is referred to as an Income and Expenditure Account rather than a Profit and Loss Account.
• Terms such as surplus/deficit are used rather than profit or loss.
• No share capital will appear on the Balance Sheet or within the notes.
• Since the company has no shareholders, the reconciliation of movements in shareholders’ funds is not required.
• A members' liability note is disclosed.

Note also:

• CLGs are applicable in both the UK and Republic of Ireland.
• The application does not support CLGs for Charities. There is a separate Charities Master Pack for these.

Statutory database

To implement CLGs, within the statutory database access: General > Client Preferences > Companies Limited by Guarantee (CLGs):

Once CLG status has been activated, there are further choices. The first allows the user to identify whether this is a CLG run for profit:

Where a CLG company is run for profit, there are very few differences from a non-CLG company. It is simply a company without share capital.

Secondly, for CLGs that are not run for profit, there are optional wordings which can be overriden:

Within the statutory database there are additional nodes (with related default paragraphs) for CLGs not run for profit, which only appear once non-profit CLGs have been implemented. They are as follows:

• Accounting Policies
  • Income and Expenditure (#clg2)
  • Taxation (#clg3)
• Profit and Loss Account / SOCI Notes
  • Income/Service Charges
    • Income (#clg4)
    • Service Charges (#clg5)
    • Free Format Text (#clg6)
  • Insurance (#clg7)
  • Fire Safety (#clg8)
  • Taxation (#clg9)
• Balance Sheet / SOFP Notes
  • Members' Liability (#clg10) (will also be activated for CLGs run for a profit)
• Other Notes
  • Related Party Transactions (#clg13)
  • Common Areas (#clg11) 
  • Planned Expenditure (#clg12)

Correspondingly, there will be suppression of statutory database items which relate only to companies with share capital, or (where relevant) those run for a profit.

Formats

Within the full collection, the following formats are specifically for CLGs:

• Insurance (CLG) - Note 101
• Fire Safety (CLG) - Note 102
• Members' Liability (CLG) - Note 103
• Common Areas (CLG) - Note 104
• Planned Expenditure (CLG) - Note 105

In relation to the following notes, separate tabs exist within the note for non-profit CLGs:

• Turnover - Note05
• Taxation - Note18
• Related Party Transactions - Note74

Recommended postings

Service Charges Due - When posting 'service charges due' it is recommended to use nominal code 6785. This will ensure the correct wording within the Debtors note.
Service Charges Paid In Arrears - When posting 'service charges paid in arrears/advanced' it is recommended to use nominal code 8030 or 9191. This will ensure the correct wording within the Creditors notes.
Sinking Fund - When posting balances to the 'Sinking Fund' it is recommended to use nominal codes 9745 to 9747. This will then flow through to 'Other Reserves'.

Impact on financial statements

• The Profit and Loss account will not normally output in the full accounts if the value of the name range PROFIT is zero in both years. There is a statutory database flag under Profit and loss account > Presentation that provides the option to include a P&L page comprising a text statement that the company was dormant.

• An accounting policy will output to advise that the company has not traded in either period and therefore the income statement has not been included.
• The dormant audit exemption statements will appear at the bottom of the balance sheet. There is a statutory database paragraph node called Audit Exemption Dormant with reference #bs99908.
• Transitional exemptions for dormant companies: Within Accounting Policies > Accounting Convention a new paragraph has been added that can selected from the paragraph node 'Transition to FRS102'. The paragraph contains the standard Transition to FRS 102 text with an additional sentence stating that the company has availed of the transitional exemptions for dormant companies and therefore continues to use existing accounting policies for reporting assets, liabilities and equity.

Points to note when adopting dormant accounts

Financial instruments accounting policy - The paragraphs within the Financial Instruments policy will output if any text has been entered or a paragraph selected from the dropdown in the stat db. The following paragraphs nodes have default paragraphs assigned to them in FSR 102 trading, however when #dormant is positive the default paragraphs will be set to 'None' and therefore will not print. To include the paragraphs, select the required paragraph from the dropdown in the statutory database and this will roll forward year on year.

• Other financial assets #cd999134
• Impairment of financial assets #cd999139
• Other financial liabilities #cd999149

Going concern accounting policy - If you wish to exclude this from dormant accounts, clear the paragraph attached to the node in the statutory database.

iXBRL tags -The dormant information has not been tagged in 2016.1 SP. The tags for dormant TRUE/FALSE and the section 480 audit exemption iXBRL tag will be added in a future release.

Create new farm client in CCH Central

When setting up a Farm FRS 102 Client, in the Create Client Wizard Main Details tab, the Contact Type is Limited, same as standard limited company. In the Accounts tab, the options to choose are under Type, select Company and under Entity please select Limited (FRS 102) and under Chart select Limited Farm (FRS 102).

Create FRS 102 farm accounting period for an existing client

Open the Client and select the Accounts Production tab, click in the grid to create a new accounting period:

Type: select 'Company'.
Entity: select 'Limited (FRS 102)'.
Chart: select 'Limited Farm (FRS 102)' (Note: tooltip message appears to remind user to choose the farm chart).
Set other fields as required and click OK.
Double-click the accounting period row on the grid to load the accounts production screen.

Additional features for farm clients

By selecting the farm chart of accounts on accounting period creation you are activating a hidden flag called #farm1, which is used in various places to trigger the appearance of rows, formats or statutory database items if the Client is a farm.

Nominal ledger

The chart of accounts for Farms FRS 102 is completely new and does not resemble the old UK GAAP 3 or 4 digit Farm charts. It has been based on the existing limited FRS 102 Chart of Accounts but it has been substantially revised to incorporate the disclosures required for farming.

Broadly speaking we have made use of sub-codes to enhance the chart to provide the detail required for recording farm specific transactions. The main changes have been applied to the following sections:

• Revenue (0010 to 0499)
• Cost of sales (0500 to 0999)
• Biological assets (FRS 102 6650 to 6679/FRS 105 6650 to 6669)
• Stocks/Inventories (7000 to 7099)

For example Revenue has been divided into groupings with sub-coded further analysis:

• Revenue - sales of livestock (main code 0010)
  • Livestock – Dairy (subcode – 01)
  • Livestock – Beef (subcode – 02)
  • Livestock – Sheep (subcode – 03)
  • Etc
• Revenue - agricultural harvested produce (main code 0015)
  • Milk (subcode – 01)
  • Etc
• Revenue - arable (main code 0020)
  • Wheat (subcode – 01)
  • Etc
• Revenue – food crops (main code 0030)
  • Potatoes
  • Etc
• Revenue – feed crops (main code 0040)
  • Hay
  • Etc

To review the new Farm chart of accounts in more detail you may prefer to export to Excel. Once you have created a Farm FRS 102 accounting period, navigate to Chart of Accounts and click on the Export to Excel option.

Quantities

As mentioned in the beginning of this appendix, this initial master pack for farms does not support detailed management information. It is our intention to provide more comprehensive analysis in a future release and we will look to enhance the product with some statutory database grids to support recording of top level quantity/yield information.

It is possible to record quantity balances as part of the journal entry process in CCH Accounts Production. The quantity data can then be viewed in the trial balance screen, on reports and presented on the face of formats if required. However our standard formats do not contain the formula to present this information, the user would be required to edit the format and add the commands as shown below:

=APQTY("a,001001")
This will display the current accounting period quantity balance for nominal code 001001 RevenueLivestock - Dairy.

=APQTY("[a,*TOTREV]")
This will display the current accounting period quantity balance for name range TOTREV.

=APQTYCODE("[*TOTREV],S,a,-1,0,ab")
This will display a list of all the current year quantity balances for nominal codes within name range TOTREV, which have activity in the current or comparative periods. By deleting the 'S' parameter, individual sub code balances will be combined into their parent nominal code. Quantity data is also available from a Saved Trial Balance, using the above commands but substituting the period reference 'a' for the User Defined Reference (g to z) you have assigned.

For more detail on Support for 'Quantity data' please see item 57234 in the 2014.1 release notes.

Statutory database

The Statutory database is very similar to the standard FRS 102 Limited database, with some enhancements to show some farm specific disclosures.

The areas where we have added new nodes (or folders) are:

• Accounting Policies - Biological Assets
  • Recognition (#fm60)
  • Measurement – Fair Value Model (#fm61)
  • Free Format Text – Fair Value Model (#fm62)
  • Measurement – Cost Model (#fm63)
  • Depreciation – Introduction – Cost Model (#fm64)
  • Depreciation Rate Wording (#fm45 - 52)
  • Free Format Text – Cost Model (#fm65)
• Balance Sheet/SOFP Notes - Biological Assets
  • Cost Model
    • Asset Type Headings (#fm10 -17)
    • Free Format Text (#fm19)
  • Fair Value Model
    • Asset Type Headings (#fm20 -17)
    • Free Format Text (#fm29)
  • Revaluation of assets – yes/no (#fm30) o
  • Revaluation of assets text (#fm31) o
  • Historic Cost (#fm32 – 37) o
  • Historic Cost Text (#fm38) o Revaluation Surplus (#fm39)
• Lead Schedules – Biological Assets
  • Section Reference Cost Model
  • Section Reference Fair Value Model
  • Main Lead Schedule Comments (#ls210)
  • Livestock 1 Comments (#ls211)
  • Livestock 2 Comments (#ls212)
  • Livestock 3 Comments (#ls213)
  • Livestock 4 Comments (#ls214)
  • Livestock 5 Comments (#ls215)
  • Crop 1 Comments (#ls216)
  • Crop 2 Comments (#ls217)
  • Other Comments (#ls218)
  • Section Sign-Off

Formats

The format collection is not new or unique to farms, it is the same collection used for FRS 102 Limited entities.

The collection has been enhanced to include a brand new note for Biological Assets (note112). In addition to this the following formats have been enhanced to support farm disclosures:
Balance Sheet/SOFP - Row added under Fixed Assets to support Biological Assets, with cross reference to new note Biological Assets (note112)
Statement of Cash Flows – two new rows added for purchase and disposal of biological assets
Accounting Policies – new section added for biological assets

Farm Enterprise Accounts Producers of farm accounts can apply their own analysis to sales and direct costs, and therefore can prepare a detailed profit and loss account which reflects that analysis, either in summary or analysed by enterprise or activity. An example of the latter follows:

This analysis uses up to 10 enterprises defined in the nominal chart, as in the following example for purchases:
0600 Purchase of livestock
0605 Transfers between herd and livestock
0610 Purchases - Enterprise 1
0620 Purchases - Enterprise 2
0630 Purchases - Enterprise 3
0640 Purchases - Enterprise 4
0650 Purchases - Arable (excludes seeds and other inputs)
0660 Purchases - Enterprise 6
0670 Purchases - Enterprise 7
0680 Purchases - Enterprise 8
0690 Purchases - Enterprise 9

These codes are subcoded, eg for 0600:
060001 Purchase of livestock - dairy
060002 Purchase of livestock - beef
060003 Purchase of livestock - sheep
060004 Purchase of livestock - pigs
060005 Purchase of livestock - poultry
060099 Purchase of livestock – other

This arrangement permits users to analyse income and direct costs in a variety of ways:

• For many farms, there is a logical split between Livestock (0600-0609 codes), Arable (0650- 0659) and Other (0690-0699). The chart assumes this split and the relevant codes are prepopulated with common subcodes for those Enterprises.
• Some farms may wish to analyse costs and income further. For instance, Livestock might be split between Dairy and Sheep. In that case, 0600-0609 could be used for Dairy while 0610- 0619 is used for Sheep. The appropriate subcodes (01-99) would be set up under 0610 etc.
• Arable might be split into (say) Wheat and Barley, or split by harvest.

Important characteristics of the coding structure

• Descriptions: The management accounts pick up the code and subcode descriptions directly from the nominal chart. Therefore the user can customise the chart to match the characteristics of each Enterprise for each farm.
• Income: The general structure follows the 9 Enterprises plus 'other farm income' and the chart has extensive coding already set up.
  • 0010-0019 Livestock
  • 0020-0049 Arable
  • 0050-0059 Other income, included as Enterprise 9
  • 0061-0069 Income for each of the other Enterprises (eg 0061 is for Enterprise 1 and users would add subcodes to 0061 to analyse that income)
  • 0070-0109 Reserved for future use
  • 0110-0449 Other farm income (shown after the Enterprise margins)
  • 0450 Transfers to herd and flocks treated as livestock income
  • 0451-0499 Reserved for future use
• Costs:
  • 0500-0599 Stocks
  • 0600-0699 Purchases and transfers (mainly applying to livestock)
  • 0700-0799 Direct costs
  • 0800-0899 Wages allocated to Enterprises
  • 0900-0989 Reserved for future use
  • 0990-0999 Direct costs not allocated to specific Enterprises

Stocks 0500-0599: The appropriate treatment of inventories in the accounts depends on the characteristics of the specific Enterprise. Livestock inventory movements in some cases (but not all) would be regarded as an adjustment against purchases/cost of sales, whereas Arable inventories would normally be part of the 'output'. For the Enterprise accounts, there are three options based on postings as in the following example for livestock:

• 0500 Opening livestock (as separate adjustment)
• 0501 Opening livestock (adjusts sales)
• 0502 Opening livestock (adjusts purchases)
• 0503 DO NOT USE 0503-0504
• 0505 Closing livestock (as separate adjustment)
• 0506 Closing livestock (adjusts sales)
• 0507 Closing livestock (adjusts purchases)
• 0508 DO NOT USE 0508-0509

0500 & 0505 Stocks c/fwd and c/fwd are shown as a separate pair of rows after sales and before purchases.
0501 & 0506 will adjust sales in the enterprise accounts.
0502 & 0507 will adjust purchases.

• Transfers 0605-0609: The not distinguish between transfers in and out, but if the user wishes to show both (rather than just the net figure), the subcodes can be amended or extended to do this.

• Direct costs 0700-0799: There are standard subcodes set up for Livestock and Arable, but users will normally amend and extend these to reflect the farm’s characteristics.
• Wages 0800-0899: These are provided so that wages can be allocated from elsewhere in the chart to the Enterprises. These codes are not subcoded by default but the user can extend them with subcodes (eg to distinguish between wages and subcontract).
• Unallocated direct costs 0990-0999: These subcoded items are provided in case users wish to distinguish between direct costs (or variable costs, or shared costs – the description can be amended) and other unallocated costs of sales. There is no need to use these codes unless this distinction is relevant, and any costs not transferred here from cost of sales will be shown in the trading account as a separate line after unallocated direct costs.
• Cost of sales 1000-1999: These are treated in the accounts in the same way as non-farm cost of sales

Options in the statutory database under Management Schedules

1. Users can choose to show the Enterprise version of the farm accounts, analysed by activity. If this option is not chosen, the user will see the standard management accounts, but with a breakdown of costs of sales between stock movements, purchases, direct costs and other cost of sales.
2. Users can add or amend various descriptions used in the trading account.