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 All you need to know about the financial reporting obligations for your organisation.


Financial reporting covers all types of entities: 

• Sole trader and partnerships

• Limited companies and limited liability partnerships

• Charities

Each of these entities have legislation covering what needs to be reported and how.

Why is it necessary?

It is important that financial statements are prepared using a consistent basis so that users of these can be sure they are looking at figures which should be comparable to similar organisations and are reliable.

Users being: 

• Lenders

• Investors

• Charity Benefactors

• HM Revenue and Customs

Sole Traders and Partnerships

These have the least governing legislation and have to follow HM Revenue and Customs guidelines.  It is fair to say that most proprietors of their businesses understand and follow these.

Limited Companies and Limited Liability Partnerships

In the case of companies, it is the Directors and for limited liability partnerships the partners who are responsible for making sure the financial reporting regulations are followed.


There are three types of charities: 

• Unincorporated

• Those which are also companies limited by guarantee 

• Charitable incorporated organisations

In each case it is the Trustees who carry the responsibility for financial reporting.

Each type of entity has its own governing legislation, but in 2013 the Financial Reporting Committee (FRC) introduced the Financial Reporting Standard 102 (FRS102).


The purpose of this was to standardise reporting by all types of entity.  It was introduced over a period of time to enable all users of accounts to feedback to the FRC comments on the standard.  It has recently undergone its triennial review 2017 and the principle effective date for these amendments is accounting periods beginning on or after 1 January 2019.

FRS102 first became effective from 1 January 2015.  It is probably the most radical re-write of accounting standards for decades.  It is fair to say that it has removed a lot of ambiguity from financial statements now being prepared.


In addition, Trustees of Charities have their own guidance to follow, set by the Charity Commission (CC).  Depending on the type of Charity and its size will govern what form the financial statements need to take, whether they are prepared on a cost or accruals basis, whether they need independent review or an audit or neither.  It is the Trustees responsibility to make certain the financial statements are correctly reported. 

Authorities reported to

In the case of companies, limited liability partnerships, and charities which are limited by guarantee it is Companies House who monitor the financial statements, for all types of charities it is the Charity Commission.  So charities limited by guarantee have two authorities! 

These accounts are all accessible to the public, therefore compliance with underlying legislation is important.

Changes afoot

Reporting standards are constantly being reviewed

• FRS102 Triennial review 2017

• There is a draft statutory instrument.  The Limited Liability Partnership, Partnerships and Group (Accounts and Audit) Regulations 2016.

It is an ever-moving target for all responsible “officers” to be aware of.

These officers need to take advice to make certain they are fulfilling their roles effectively and to the benefit of the organisation they represent.


Please do not hesitiate to contact me for further information.