Abridged Accounts
Definition
Under the EU Accounting Directive (2014), a simplified form of annual accounts that may be filed by an entity qualifying as a small or medium company. The new rules allow certain more detailed items of financial information to be excluded from both the balance sheet and the profit and loss but only where this has been agreed unanimously by share holders. Abridged accounts are intended for both company members and publication. In the UK the new regime applies to financial periods beginning on or after 1 January 2016.
Example
Example 1:
A small Lagos-based logistics company with few shareholders agrees unanimously to file a simplified version of their financials with the CAC, leaving out some detailed line items similar in concept to the UK’s abridged accounts system.
Example 2:
A small family-owned restaurant chain in Birmingham, qualifying as a small company, gets unanimous shareholder approval to file abridged accounts with Companies House from January 2016 submitting a simplified balance sheet without the full financial breakdown.