Under the Companies Act 2006 and the Financial Reporting Standard FRS 102, a group of companies must produce consolidated financial statements. This means that the financial statements for each of the members of the group are combined into one set, as if it was one entity.
If the group classifies as a small, then under the Companies Act 2006, there is no requirement to prepare consolidated accounts.
The thresholds for group size are as follows;
Small – Less than £10.2m turnover, less than £5.1m total assets and less than 50 employees
Medium – Less than £36m turnover, less than £18m total assets and less than 250 employees
Large – More than £36m turnover, more than £18m total assets and more than 250 employees.
To qualify for any of these, the group must meet two of the criteria for two consecutive financial years.
It is worth noting that the number of employees is the average number over the financial year, not the number of employees at the reporting date, and the total assets is non-current plus current, without deducting liabilities.
If you require any assistance with your consolidated accounts, please get in touch with your usual contact or via our contact us form.