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CCH Software User Documentation

FRS 102 User Guide

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This is the user guide for CCH Accounts Production FRS 102 Limited formats, updated for Master Pack 49.

CCH Accounts Production - FRS 102 Master Pack 

Client Creation

Once you have installed CCH Accounts Production, you can set up a new FRS 102 Client as follows:
1) Create the Client in Central if it does not already exist.
2) On the Accounts Production tab, click in the grid to create a new accounting period:

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  • Type: select 'Company'.
  • Entity: select 'Limited (FRS 102)'.
  • Set other fields as required and click OK.

3) Double-click the accounting period row on the grid to load the accounts production screen.

Accounting Periods

FRS 102 3.23 An entity shall clearly identify each of the financial statements and the notes and distinguish them from other information in the same document. In addition, an entity shall display the following information prominently, and repeat it when necessary for an understanding of the information presented:
(c) the date of the end of the reporting period and the period covered by the financial statements

1  Where an entity has the same period end date for each year (eg 31 December for both the current and comparative years), the information required will be shown automatically by the combination of the page headings (which will specify eg 31 December) and the years (eg 2022 and 2021) shown in the column headings. 

2  Where an entity has different period end dates (eg 30 December in the current year and 31 December for the comparative):

  • The change in period end should be disclosed and explained within the introductory paragraph of the directors' report and within accounting policies.
  • The period end dates will be shown automatically on the balance sheet because a separate row will be triggered, to show the day and month as well as the year for both current and comparative. The day and month for the balance sheet are picked up from #cd61 in the General information section of the statutory database (the "Period end" box in the screenshot below).

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  • References to the period length in the column headings are entered by the user using #cd59 (the "Period" box in the screenshot above).
  • References in text that would normally return "year" can be changed to "period" using #cd9  (the "Period Description" box in the screenshot above). This will affect the main title at the top of each page, the text in rows that refer to periods, and text paragraphs (eg, it will now refer to "Depreciation charged in the period")

The result of the above can be seen in the income statement, balance sheet and notes below:

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Note that the column headings for notes do not repeat the day and year of the period ends, or the length of the period. It is not compulsory to do this. 

3  Where the first accounting period is being reported, the period end will be shown automatically. It might however be necessary to clarify the period start and period length.

  • The period length is disclosed using #cd9 as set out above.
  • The period start would normally be disclosed by adding that information to the directors' report.

4  Where the user wishes to override the main descriptions shown as page headers, this must be done as follows.

  • For each "page" affected - ie, all formats except for notes: Apart from the cover page (where the text is shown on the page), the #cd9 period description is picked up in the Page Setup.
  • For notes: The page header is picked up for all notes from the Page Setup in the first note, ie normally the accounting policies note.

Nominal Ledger

The nominal ledger for FRS 102 companies is a 4 digit chart of accounts. The coding structure adopted in these formats has been designed to cater for the requirements of FRS 102 and IFRS. The nominal chart has the following key identifiers:

  • Code ranges that group similar items together
  • Descriptions that enable the user to understand the posting
  • Category information which identifies where a posting will end up in the financial statements

The nominal chart is searchable both by browsing through codes and by entering text, and displays the 3 identifiers above, in data entry and information screens. Therefore, the entry of information is normally straightforward.

Note: although sub codes have not been used within the master chart of accounts, users can always create them if further analysis is required.

The overall structure of the nominal ledger can be summarised as:

Income Statement

Turnover
Cost of sales
Distribution costs
Administrative expenses
Exceptional items
Other operating income
Investment revenues
0001 - 049Z
0500 - 199Z
2000 - 299Z
3000 - 398Z
3990 - 399Z
4000 - 419Z
4200 - 439Z
Other gains and losses
Finance costs
Taxation
Discontinued activities
Extraordinary items
Dividends and reserve movements
Income statement suspense
4400 - 449Z
4500 - 459Z
4600 - 479Z
4800 - 489Z
4900 - 499Z
5000 - 589Z
5900 - 599Z

Balance Sheet

Intangible assets
Tangible assets
Investment properties
Non-current financial assets
Non-current derivatives
Finance lease receivables
Investment in group companies
Inventories
Trade and other receivables
Current asset investments
Short term investment in groups
Short term investments
Current derivatives
Cash and cash equivalents
Assets held for sale
Current trade and other payables
Current tax liabilities
Current borrowings
Non-current borrowings
Non-current trade and other payables
Non-current tax liabilities
6000 - 619Z
6200 - 669Z
6700 - 674Z
6750 - 679Z
6800 - 684Z
6850 - 689Z
6900 - 699Z
7000 - 709Z
7100 - 749Z
7500 - 751Z
7520 - 759Z
7600 - 769Z
7700 - 779Z
7800 - 789Z
7900 - 799Z
8000 - 814Z
8150 - 819Z
8200 - 889Z
9000 - 906Z
9070 - 912Z
9130 - 915Z
Non-current convertible loans
Non-current borrowings
Retirement benefits
Deferred tax
Provisions
Liabilities associated with held for sale assets
Share based payment liability
Ordinary shares
Preference shares
Equity reserve
Share premium
Revaluation reserve
Capital redemption reserve
Own shares reserve
Other reserves
Hedging reserve
Non-controlling interests
Spare reserves (future development)
Retained earnings
Spare reserves (future development)
Balance sheet suspense
9160 - 916Z
9170 - 929Z
9300 - 939Z
9400 - 944Z
9450 - 948Z
9490 - 9498
9499 - 949Z
9500 - 959Z
9600 - 969Z
9700 - 970Z
9710 - 971Z
9720 - 9734
9735 - 973Z
9740 - 9744
9745 - 975Z
9760 - 976Z
9770 - 979Z
9780 - 989Z
9900 - 990Z
9910 - 989Z
9990

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:
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Nominal codings to be aware of

Exceptional items

There are codes in each area of the income statement:
0499    Exceptional item - Sales
1999    Exceptional item - Cost of sales
2999    Exceptional item - Selling and distribution
3989    Exceptional item - Admin costs (incl in Admin range)
3990    Exceptional 1 - Above operating profit
3991    Exceptional 2 - Above operating profit
3992    Exceptional 3 - Above operating profit
3993    Exceptional 4 - Above operating profit
4199    Exceptional item - Other operating income
4800    Exceptional - fair value gains and losses on investment properties
4801    Exceptional - fair value gains and losses on foreign exchange contracts
4802    Exceptional - profit or loss on sale of discontinued activity 1
4804    Exceptional - profit or loss on sale of discontinued activity 2
4806    Exceptional - profit or loss on sale of discontinued activity 3
4808    Exceptional - profit or loss on sale of part interest group undertaking

The codes permit the user to either:

  • include these items within the broad category (eg posting to 0499 includes it as part of sales); or
  • show them separately on the face of the income statement (eg posting to 3990)

If any postings are made to an exceptional item code, the Exceptional Items note is triggered. However, the user may wish to exclude this note from printing in the situation where they have used an 'exceptional' posting simply to show the figure on the face of the income statement and decide that no further information is required.

Exchange differences and hedging gains

There are codes in each area of the income statement for exchange differences and hedging gains, eg: 
4180    Exchange differences arising on operating activities
4182    Fair value gains or losses on hedged item (other operating income)
4184    Fair value gains or losses on hedging instrument (other operating income)
4186    Reclassification of gains or losses on cash flow hedge re trading to profit or loss

Where there is a gain on a class of investment, loan or other financial instrument, it is important to post the double entry to the relevant code that captures the movement for cash flow purposes, eg:
7431    Exchange differences in the year on loans and receivables

Within the cash flow grids in the statutory database, there are override adjustments available to capture further instances of non-cash movements such as these.

Note: hedging gains are not treated as exchange gains but as fair value gains. (See also note below relating to the foreign currency reserve).

Fair value gains for investment properties

The rules for investment properties are different from those for fixed asset investments.  All gains - including gains upon disposal - are treated as fair value gains on investment properties.  (FRS 102 Section 16).  Therefore, you would normally post such gains to either:

  • 4170 (which will include them in the line 'Other gains and losses' ** see note below) or 
  • 4800 (which will show them as a separate line after other gains and losses) or 
  • 4165 (which includes it in other operating income)

If you wish to show it as a separate line in the Income statement, there are various 'exceptional' income/ cost codes you can post to, including sales, other operating income, other income/costs above operating profit.  Posting to an 'exceptional' code such as 4800 does not mean it has to be called exceptional, and you can suppress the Exceptional items note that pops up as a result. It is entirely acceptable to show additional lines compared with the Companies Act formats where the additional information is relevant. 

** As for the description on the Income statement if you post to 4170: 'Amounts written off investments' is the Companies Act description. Most practices would change this to 'Other gains and losses', which is permitted since the date FRS 102 came in force. This is either done by changing Term29 in Compliance terminology in the practice pack or by changing the description on the format.

Codes that are allocated to assets or liabilities dependent upon their value

The following will be shown under assets or liabilities according to their value:

Derivatives    6800 - 6820 and 7700 - 7720
Bank  accounts 7800 -7888Z
VAT control account 8160 (but users can also specifically post to the VAT recoverable code 7305 if they wish to show both an asset and a liability)

Note that corporation tax balances (8150) and PAYE (8170) creditor balances are not automatically shown as assets if they are debit balances and users need to specifically post to the following codes when recording assets:

7280    Corporation tax repayable
7290    Corporation tax recovered in year
7330    Income tax recoverable

Codes passing through Other Comprehensive Income

The following will go through OCI rather than the income statement and will directly affect reserves:

5120    Currency translation differences (OCI)
5210    Actuarial differences on defined benefit pension schemes recognised in OCI
5230    Share of OCI - associates
5231    Share of OCI - joint ventures
9721    Revaluation reserve - PPE or intangibles revaluation
9724    Revaluation reserve - share of associate revaluation
9726    Adjustments to fair value of financial asset
9727    Fair value adjustments reclassified to profit and loss
9756    CTR Translation differences in current year (OCI)
9759    CTR Amounts reclassified to profit and loss (IFRS only) -
9761    Gain or loss recognised on cash flow hedges
9763    Reclassification of OCI to income re cash flow hedges
Plus tax on the amounts noted above (5220,5350,9723,9728-31,9734,9758)

Deferred income, accruals and government grants

Current accruals 8085..808Z
8085    Accruals
8086    Accrued defined contribution payments
8087    Accrued defined benefit payments
808Z    Last account in accruals range

Current deferred income 8091..8092
8091    Deferred income - government grant - current
8092    Deferred income - spare account - current

Non-current accruals 9111..9113
9111    Accruals
9112    Accrued defined contribution payments
9113    Accrued defined benefit payments

Non-current deferred income 9115..9116
9115    Deferred income - government grant 
9116    Deferred income - spare account 

Deferred income - separate line 9497..9498
9497    Deferred income - government grant - on balance sheet
9498    Deferred income and accruals - on balance sheet

UK small companies can show accruals and deferred income as a separate line in the balance sheet. If the amounts are treated as creditors instead, the accruals and deferred income are not shown separately in creditors; it is part of Other creditors.  The regulations state 'In Format 1, accruals and deferred income may be shown under item J [Accruals and deferred income as separate line in the balance sheet] or included under item E.4 [Other creditors , 1 year] or H.4 [Other creditors > 1 yr], or both (as the case may require).'  The important word here is 'included', ie it's part of E4 'Other creditors' and not a separate item to list after E4.

UK non-small companies have 'Accruals and deferred income' as a Companies Act format line in 3 places:

  • as a separate line in Creditors < 1 yr (8085-808Z),
  • as a separate line in Creditors >1 yr (9111-9113), and
  • as a separate line on the balance sheet (9497-9498).

It is up to users to decide where they want to show it.  

In these formats, the separate line in the balance sheet is described as follows:

  • 'Government grants' If 9498 is zero
  • 'Deferred income' if 9498 is not zero (excludes a reference to accruals on the basis that users would not normally show accruals there.  This is a pragmatic departure from the Companies Act description)
  • Both of those titles can be overridden by statutory database entry #bn9991673, if the user wishes to show a different description

ROI companies do not have a heading 'Accruals and deferred income' but instead have 'Accruals'.  Users would normally post deferred income to 9497 or 9498 (which shows 'Deferred income'  as a separate line on the balance sheet) unless they decide that the deferred income properly falls into the ROI heading of 'Accruals'.

Deferred income headings within the note
Heading - whole note            #bn9991673 (with defaults to 'Government grants' If 9498 is zero or 'Deferred income' if 9498 is not zero)
Description of grants            #bn9991674 (defaults to 'Arising from government grants')
Description of other deferred income  'Arising from #bn999520' (defaults to 'Other deferred income')

Statutory Database

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:
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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:

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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
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In total there are 26 Spare Notes across the database. 

Specific Areas of the Statutory Database

Client preferences

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

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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.
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  • 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:
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Ribbon mode:
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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:

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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.
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Audit exemption

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

Note: if an audit report is not required, the user can choose between including an accountants’ report within the financial statements or having no report at all.


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Type of Accountants’ Report

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

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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:

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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:
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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

Professional body

The FRS102 master packs include Auditor's or Accountant's Report paragraphs with the correct wording required for different professional accountancy bodies:

  1. Association of Chartered Certified Accountants (ACCA)
  2. Institute of Chartered Accountants in England and Wales (ICAEW)
  3. Chartered Accountants Ireland (CAI)
  4. Institute of Chartered Accountants in Scotland (ICAS)
  5. Institute of Incorporated Public Accountants (IPA)
  6. Institute of Certified Public Accountants (CPA)
  7. Association of Chartered Certified Accountants (ACCA) - ROI
  8. Association of Accounting Technicians (AAT)

99. Other

Within the Statutory Database, you may select the correct body by entering the corresponding number into the grid as shown below. This will refresh the Statutory Database and trigger the correct paragraphs to be automatically selected in the Accountants Report section.

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There is a task permission applied to this node: #Client #Can Edit Accountancy Body. Only users who have this permission may amend the value. Additionally, you can specify a default value for your firm which will be applied to any new clients that you create in CCH Accounts Production.

Open Maintenance > Accounts > Statutory Database Defaults and use the drop down list to select the correct default for your firm.

Designation

The 'designation' is the description below the firm's name on the format (eg 'Chartered Accountants'). The default designation is set in Word Items (#aw7), which can be amended for the practice. The designation can also be overridden for individual clients (eg where preparing financial statements for someone else to sign). Where no text is entered in the designation grid, the default text will be used instead.

Similar defaults exist for the common designations required where someone signs as the 'Statutory Auditor' (#aw9) or 'Registered Auditor' (#aw8).

Reference to auditor or auditors

Word Items are used to set the firm's preferences:

  • #aw11 is set by default to auditor but may be changed to auditors
  • #aw10 is set by default to auditor's but may be changed to auditors'
Fraud/irregularities section of the audit report

ISA 700 requires the inclusion of a section that deals with the risks due to irregularities including fraud.  There is guidance about what is required within this section, but no particular structure is specified, and firms are dissuaded from general statements:

A39-2. The matters required to be set out in the auditor’s report in accordance with paragraph 29-1 may be useful to users of the financial statements if they are explained in a manner that, for example:
- Enables a user to understand their significance in the context of the audit of financial statements as a whole. In determining those matters that are of significance, both quantitative and qualitative factors are relevant to such consideration.
- Relates the matters directly to the specific circumstances of the entity and are not therefore, generic or abstract matters expressed in standardized or boilerplate language.

Since each firm will have its own approach, we have set up the fraud/irregularities section to be prepared in a variety of ways, so that users can adopt the approach that best suits their practice and the individual audits:

  •  As text paragraphs with no headings.
  •  As text paragraphs with amendable headings.
  •  As an introduction followed by a table, again with amendable headings.

Separate dummy paragraphs have been set up for each potential item within the section, enabling practices to take these paragraphs and create their own versions for introductory explanations, general approach and so on. 

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).

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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.
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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

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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):
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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.
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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:

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

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

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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.

Income Statement

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.

Note: that if the third option is wrongly chosen (eg, where there exists other comprehensive income) a warning message is triggered on the income statement format.

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'.

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:

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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.'

Statement of changes in equity

The master pack includes two useful options.

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. 

Reserves presentation

The Master Pack has various reserves already set up:

Ordinary shares
Equity reserve
Revaluation reserve
Own shares
Hedging reserve
Retained earnings
(Movements: 5001-5890)
9500 - 959Z
9700 - 970Z
9720 – 9734
9740 – 9744
9760 - 976Z
9900 - 990Z
Preference shares
Share premium
Capital redemption
Other reserves (1-2)
Currency translation reserve
Non-controlling interests
9600 - 969Z
9710 - 971Z
9735 - 973Z
9745 - 9754
9755 - 975Z                                                        9770 - 979Z

The revaluation reserve, currency translation reserve and hedging reserves have specific codes set up which will show as movements in Other Comprehensive Income. Own shares and other reserves have amendable headings.

Retained earnings can be further subdivided between distributable and non-distributable reserves (see below).

Presentation options

There are three options offered in flag #bn9991396:
Do you wish to disclose separate notes for all active reserves in addition to disclosure in the Statement of Changes in Equity / Statement of Income and Retained Earnings? If so, choose between:
- showing the complete notes including the movements
- showing text only, within individual notes [the note will display only if text has been entered]
- showing text only, in one combined 'Reserves' note

The software will default to showing text only, and therefore the individual notes will not be triggered unless the user enters text in the free format paragraphs provided. Where 'complete notes' is chosen, the note will be triggered if either there are current or comparative nominal balances, or if text is entered.

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:

9901
9902
9907
9908
CY Profit transferred to 9907 non distributable
PY Profit transferred to 9908 non distributable
Non distributable CY profit from 9901
Non distributable PY profit from 9902

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:

9900 Retained earnings brought forward £(100,000) credit

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

9902
9908
PY Profit transferred to 9908 non distributable
Non distributable PY profit from 9902
£ 20,000 debit
£(20,000) credit

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

9901
9907
CY Profit transferred to 9907 non distributable
Non distributable CY profit from 9901
£ 3,000 debit
£(3,000) credit

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:

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… and also in the notes:
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Statement of Cash Flows

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:

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Management Accounts Collection

The Management collection provides the following formats:

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Note: there is also an Exception Report

 

 included at the start of the Full Collection, which highlights potential problems within the formats.

 

 

The printing or suppression of most of the above formats can be set within the statutory database, as below:

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Lead Schedule Collection

Thia collection includes a comprehensive set of Lead Schedule formats. The collection consists of 'main' schedules (in upper case), and backing schedules. The statutory database contains new nodes to facilitate entering information which is then displayed on the lead schedules, eg:

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The ‘Display Draft/Adjusted Mode’ allows users to determine the presentation of the lead schedules. If ‘Yes’ is selected then the lead schedules will have 4 columns showing (as shown below for backup lead schedule):

  • Draft
  • Adjusted
  • Final
  • Prior year

These lead schedules will track from a client TB through to Final Accounts. If ‘No’ is selected then the lead schedules will only have 2 columns (as shown below for main lead schedule):

  • Current
  • Comparative

An example of a Main Lead Schedule is shown below:
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Note: only the main schedules include prepared by/reviewed by / partner review details.

The numerical content displayed on the lead schedule comes from the Trial Balance. The 'Adjusted' balance displayed is based on the total of the Audit Journals input as either 'Adjusting' or 'Reclassification':
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Specific Functionality within the Financial Statements

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

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

Note: that in the example shown, you would normally want to also include a blank row below it.
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Alternatively, click the  X  to cancel. A tooltip will be added to the cell to indicate the title rows:
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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:
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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:

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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.

Appendix 1A - Transition to FRS 102

The FRS 102 legislation states:
Section 35 Transition to this FRS of FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland applies to the first-time adoption of FRS 102 and sets out how an entity prepares its first financial statements that conform with that standard.
FRS 102 will be effective for accounting periods beginning on or after 1 January 2015, although early application is permitted. It requires the comparative and opening balance sheet at the date of transition to be restated in accordance with FRS 102: the date of transition being the beginning of the earliest period for which an entity presents full comparative information. However, the opening balance sheet itself does not need to be presented.
FRS 102 requires the presentation of reconciliations of equity determined in accordance with its previous financial reporting framework and its equity determined in accordance with FRS 102 at two dates:
(a) the date of transition to FRS 102: and
(b) 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. FRS 102 requires the presentation of a reconciliation of 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 to its profit or loss determined in accordance with FRS 102 for the same period.
For example, for an entity with a 31 December year end, the first year of mandatory application will be the year ending 31 December 2015. The entity will need to restate its opening balance sheet at the date of transition (eg at 1 January 2014) and comparative balance sheet (eg at 31 December 2014) in accordance with FRS 102, although the opening balance sheet need not be presented. The entity will need to prepare reconciliations of equity at 1 January 2014 and 31 December 2014 and of its profit or loss for the year ending 31 December 2014.

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. 

Note: you will separately be adjusting the current year opening balances using normal journals. Restatement journals are made via the usual Journal Entry screen, by first amending the Type from 'Journal' to 'Restatement':

Note: Restatement journals will only be available if a comparative accounting period is present.

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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.

Note: that for reserves postings, you need to distinguish between adjustments to the (prior year) opening balance and the movements in the year. If for instance the uplift in value of the investments noted above passes through a revaluation reserve, then £3,000 will be posted as a credit to the opening balance for that reserve and £2,000 will be posted to the nominal code for the movement during the year. (For investments held at fair value where the increase passes through P&L, the £2,000 would go to a P&L code). The question that needs to be posed is: 'If these changes had happened last year, how would they have been reflected in postings?' Transition adjustments should replicate this.

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.

Note: your restatement journals in the current year will already have adjusted the opening balances of the prior year. For instance, if you are recording an additional wages creditor of £10,000 at the end of the prior year, and £3,000 of this was there at the start of the prior year, then the current year restatement journal (affecting the prior year) will adjust the wages code by £7,000 and the retained profit b/fwd code by £3,000. This £3,000 adjustment will however not match the pre-comparative year closing balance until a restatement journal is made for it.

  • 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.

Note: that normally this relates to pre-prior closing balances ONLY. The restatement journal will not require postings to income and expenditure codes. (In the above example, you would debit the P&L reserve by £3,000 and credit the wages creditor). If however you are wanting to show the effect in more than a two-period set of accounts – eg if you are includindg a five year record – you need to follow the same rules for comparative year restatement journals as apply for current year restatement journals. (In the above example, you would debit the P&L wages code, rather than the P&L reserve).

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'.

Note: the effect of the restatement journals need to be reflected in the current year entries. For instance, if the closing balance of the Revaluation reserve has been uplifted by £5,000 in the prior year, then the current year opening balance of that reserve needs to have been updated to agree to this new figure. Therefore, where the current year figures have been created by rolling forward from an un-restated prior year (or by manual entry of the same), an opening balance journal will be required in the current year.

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

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

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  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.

Note: that the grid for the Income Statement only displays Columns 1 and 2.

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)

Note: that the current year TB would also need to reflect the total effect of this, ie deferred tax creditor Cr £3,000 and Retained profits Dr £3,000.

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.

Appendix 1B - Prior Period Errors

Errors in previous accounting treatment might be made at the same time as a transition to FRS 102, or might be made independently of transition adjustments. Both type of adjustments are made through restatement journals. The following sets out the procedure to be adopted.

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

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

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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'.

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

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Note: that there is also an option to suppress the restatement lines in this statement:

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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):

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

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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.
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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.

Note: that the PYA effect on the retained earnings figure has yet to be entered below, which is why there is a warning that £2,000 remains to be allocated.

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

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4) If the 'List of changes' for transition is being used, the figures expected are automatically adjusted for PYA entries:
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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:
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6) Where the prior period adjustments materially affect the prior year opening balances, these are entered in the grid set out in (2) above.

Appendix 2 - FRS 102 Reporting Options

This section covers Small Companies Exemptions, Abridged Accounts and Reduced Filing Copy.

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.

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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:
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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.

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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.

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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:

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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:
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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.

Appendix 3 - Companies Limited by Guarantee

A Company Limited by Guarantee (CLG) is a private company that does not have shareholders or share capital. It has members, called guarantors. The guarantors give an undertaking to contribute a nominal amount (typically very small) towards the winding up of the company in the event of a shortfall upon cessation of business. It cannot distribute its profits and these are generally reinvested back into the company. Because of this CLGs may apply for charitable status.

Common uses of guarantee companies include clubs, membership organisations, including student unions, sports associations, workers’ co-operatives, other social enterprises, nongovernmental organisations (NGOs), charities and property management companies.

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):

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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:

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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:

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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

Note: All pages and notes where necessary have been updated to look at #profit and #loss so that if CLG is selected, the wording changes to Surplus and Deficit, rather than Profit and Loss.

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'.

Note: Users will need to edit 'Other Reserves Headings' within the Statutory Database: Balance Sheet/SOFP Notes > Own Shares and Other Reserves > Other Reserves Headings

Appendix 4 – Dormant Companies

To adopt the dormant accounts exemptions access the statutory database, expand the general folder and on the General Information node there is a dropdown with statutory database reference #dormant:

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The dormant flag is set to Trading by default and can be set to either Dormant – Never Traded or Dormant – Ceased Trading.  These options are required by the iXBRL taxonomy. In terms of the Financial Statements, there is no difference between the two dormant variations.

Republic of Ireland

If the company is exempt from audit, the user will still need to indicate this via #cd22 'Exempt from Audit'.

UK

If the company is exempt from audit and/or applying FRS 102 Section 1A the user will still need to indicate this via #cd22 'Exempt from Audit' and #sce1 'FRS102 Section 1A – Small Companies Exemptions' respectively.

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.

Appendix 5 - Compliance Terminology

The Compliance Terminology function provides a set of variable terms used on formats and within paragraphs that can switch between 'companies act' terms and their IFRS equivalents, depending on the preference of the user. (For example 'Stocks' and 'Inventories'). The set of terms can be seen within Maintenance > Accounts > Compliance Terminology:
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Not applicable to all entities
Some Entities within CCH Accounts Production do not offer the Terminology choice, so for those Entities the maintenance screen will display the following message:
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Currently only Limited (IFRS), Limited (FRS 102) and Consolidated (FRS102) support the compliance terminology function.

Default selection for the Practice
From the Maintenance > Accounts > Compliance Terminology screen you may choose the default terminology that your firm will use when creating a new FRS 102 job. Simply make your choice by selecting the required radio button:
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Any new accounting period created will default to use the same terminology as selected here, but individual accounting periods may subsequently be changed to use the other choice if required, by editing their Statutory Database

Editing the Master Terms - If you wish to vary a given term, for example you would prefer to use 'Cash' rather than 'Cash at bank' for Term 14 when in Companies Act mode, then you can simply over-type the cell.

Note: however, you will need to be in a draft master pack version before you can edit this.

Creation of additional Terms - If you wish to create new Terms for use on your own customised formats, then you can do so as follows. Firstly, move the radio button to the 'Practice' terms option:
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A blank grid will now be displayed, and you can enter additional terms as required. The 'Term Code' field will be automatically filled in as you type into the Companies Act Term column. The new terms you add are given a slightly different syntax: #CustomTerm0, and to reference these on a Format, you must use the command =AP("#CustomTerm0")

Note: The selection of terminology will only impact the accounts print preview. Other areas of the software will not be updated to reflect the terminology choice. For example the format names, statutory database node names and nominal code descriptions will not switch, as illustrated in the example below.

Example 1 - IFRS Mode selected:
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Example 2 - Switched to Companies Act Mode:

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Appendix 6 - Republic of Ireland small abridged accounts

Ireland small abridged accounts section 353 Companies Act 2014

The option exists to produce small abridged accounts for filing under section 353 of the Companies Act 2014. A user preparing ROI accounts can claim the small size/abridgement exemption by selecting Small Company Reduced Filing from the drop down in the Financial Statements page:
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Selecting the Small Company Reduced Filing option will:

  • Exclude the Directors’ Report
  • Produce the Special Auditors’ Report for small companies
  • Exclude the Profit and Loss Account
  • Exclude the Statement of Comprehensive Income
  • Trigger Balance Sheet statement regarding size/abridgement exemption
  • Exclude the Statement of Changes in Equity
  • Include new Directors’ Interests note (if text entered in Statutory Database paragraph)
  • Update Cover page to state Abridged and Contents page to exclude pages. Exclude certain notes from printing.

Appendix 7 – Farm FRS 102 Companies

Master Pack 16.00 and above includes support for Farm FRS 102 limited companies. Farm accounts can be produced using the additional features within the normal FRS 102 Limited master pack. (They are no longer a separate entity like they were under old ukgaap).

The Farm option is available by default within the FRS 102 pack. If you wish to hide it (eg, to prevent accidental usage), you may do so by setting this Configuration Key below to a value of 0:

  • AccountsShowLimitedFarmFRS102Entity

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).

Note: There is a pop up warning message circled in red below to remind users to choose the farm chart of accounts

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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:
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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.

Note: No chart design can be perfect for all possible farm businesses. In some cases you may find it more efficient to amend the default Farm chart descriptions to provide a better fit for your individual clients.

Rounding account

The default rounding account for our Farm chart has been changed to:
001001 – Revenue – sales of livestock - Livestock Dairy
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Important: We strongly recommend you change this rounding account to another more appropriate Revenue account, if the farm’s main business is not dairy farming. This is typically the nominal account where you post your main source of income, but you may decide to write off any differences on profit and loss rounding to say sundry expenses eg 3890. To change the P&L Rounding Account: 1. select Chart of Accounts 2. select Rounding and Suspense 3. select P&L Rounding Account Change the nominal code by typing the account code or using the dropdown selection.

Warning: Take care NOT to change the P&L Close Off account, as this is the account where all the profit and loss nominal accounts close off to at year end. This should remain as 9900 Retained Profit for most users and should only be changed if you have a completely bespoke chart of accounts that you have created yourself.

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:
clipboard_e13755ed44a15c89be92688415389b496.png
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.

Note: that the stock codes can be sub-coded if desired.

  • 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.

Note: also that 0450 is set aside specifically for any transfers to herd/flock that the user wishes to treat as income.

  • 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

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  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.

 

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