cheap accountants - abbreviated accounts

Here at www.Cheaperaccountant.co.uk we are often asked if we prepare full or abbreviated accounts on behalf of clients. The answer is that we prepare both. In reality both are very useful and one is simply a subsection of the other. The two very much go hand in hand.

So what are full accounts?

Full company accounts comprise a profit and loss account, a balance sheet and detailed notes to the accounts. These are the essential elements of the full accounts.

In addition to this, full accounts will also include an accountant’s report and a director’s report. Both of which provide further important company details.

The company profit and loss statement is in practice a listing of the key categories of business income followed by a listing of the core categories of business expenditures. When income is totalled and subtracted from total expenditure the resulting figure is the company’s profit or loss for the reporting period.

The company balance sheet displays all categories of assets and liabilities as at the balance sheet date. The balance sheet date is the final day of the accounting period. The end result is to state the company’s net worth.

What are abbreviated accounts?

The abbreviated accounts are what tends to be submitted to Companies House. These are essentially a summarised version of the full accounts.

The abbreviated accounts include the company balance sheet and a reduced number of notes to the accounts. These do not include the profit and loss account.

Why prepare full accounts?

This is a fair question as only abbreviated accounts tend to be submitted to Companies House. However, only the full accounts display the profit and loss statement which is an important document for company directors and can aid decision making. Furthermore, the profit and loss statement is likely to be an essential document if you’re a company director applying for a mortgage.