Switching your accounts from FRS 105 (micro-entity) to FRS 102 Section 1A

Each accounting period is prepared under one accounting standard, its Accounts Type. Most small companies start on Micro-entity (FRS 105). If you need fuller accounts you can switch the period to Small company (FRS 102 Section 1A). Your trial balance, journals and Corporation Tax computation come with you: the same figures are shown under the new standard’s headings. The accounting policies, the working papers and some of the notes are different under each standard, so those are set up again. This article explains what is kept, what changes, how to switch and what to check afterwards.

When to switch

Common reasons to move from FRS 105 to FRS 102 Section 1A:

• The company is no longer a micro-entity. It has gone over two of the three micro-entity limits for two years running. For periods starting on or after 6 April 2025 the limits are turnover £1 million, balance sheet total £500,000 and 10 employees.
• Someone needs more detail. A lender, investor or the directors want the extra notes 1A gives, for example tangible fixed assets, debtors and creditors broken down.
• The company holds investment property or other assets at fair value. FRS 105 doesn’t allow revaluation.

The same steps work the other way, from FRS 102 Section 1A back to FRS 105.

Firms in the beta also see Full FRS 102 in the list. Moving between Section 1A and full FRS 102 keeps everything, including the notes, accounting policies and working paper answers, because the two share their headings, notes and policies; going back to Section 1A only removes the notes full FRS 102 adds. See Full FRS 102 accounts (beta).

Before you switch: what is kept and what changes

These are kept:

• The trial balance: every figure for this year and the prior-year comparatives, however you entered them, with the mappings of imported accounts.
• Journals and any breakdown of profit and loss lines.
• The Corporation Tax computation: capital allowances, adjustments, losses, loans to participators, and which lines you marked as trade or property.
• Working paper review points and documents linked to trial balance lines.
• Directors, addresses and the period dates.

These change:

• Headings. Each account is shown under the new standard’s heading. For example, FRS 105 puts most costs under Other charges, while FRS 102 Section 1A splits them into Administrative expense, Distribution costs and Interest payable and similar expenses.
• Accounting policies are cleared. FRS 105 accounts have none, and FRS 102 Section 1A policies need choosing.
• Notes. A note that exists under both standards (average number of employees, contingent liabilities, your first free text note) moves across with its content. Other notes are removed and the new standard’s default notes are added.
• Working paper answers are cleared, because each standard has its own questions.
• Rounding is recalculated.

Before you switch, copy any note or policy wording you wrote yourself so you can paste it into the new notes.

When you can’t switch

The Accounts Type is fixed once the period has been filed or locked. Instead of the Edit button you’ll see one of these:

• Cannot change — the accounting period is locked. Unlock the period first if you need to change it.
• Cannot change — the Corporation Tax return has been submitted
• Cannot change — the accounts have been submitted to Companies House

A return or set of accounts that has already been filed was prepared under the old standard and stays that way. If you need to refile under a different standard, contact support.

Switch the Accounts Type

1. Open the accounting period. The Overview page lists the period settings. Find Accounts Type and click Edit.

2. In Change Accounts Type, choose Small company (FRS 102 Section 1A) and leave Keep my trial balance, journals and tax computation selected.
3. Read the list that appears. It names any lines that move to a different kind of heading, and any notes that will be removed.
4. Tick I understand what will change, then click Change Accounts Type.

The page reloads and Accounts Type now shows the new standard. Your figures are already in place.

After you switch

• Check the Corporation Tax computation. The total profit is the same, but a line that moved heading can be treated differently. The usual one is loan or bank interest: under FRS 102 Section 1A it sits under Interest payable and similar expenses and is deducted in the trade, even if you had marked the line as property. If the loan isn’t for the trade, for example a mortgage on an investment property, enter it under Non Trade Debit.
• Review the notes and choose the accounting policies. FRS 102 Section 1A has more notes than FRS 105, for example tangible fixed assets, debtors and creditors. They pick up figures from the trial balance. Paste back any wording you saved. See Notes to the accounts (FRS 102 Section 1A).
• Check the balance sheet balances and that profit before tax matches what you had before.
• Switching to FRS 105? A micro-entity can’t carry revaluations, fair value movements or deferred tax. The switch lists any such balances; they are kept, so remove or re-map them on the trial balance.
• If you use working papers, answer them again for the new standard.
• Simple Entry is for micro-entity (FRS 105) accounts only. After switching to FRS 102 Section 1A, Trial Balance opens the full grid with the figures you entered.

Starting again instead

If you would rather begin with an empty trial balance, choose Start again with an empty trial balance in the same window. This also clears the trial balance (this year and the comparatives), journals, every note and the working paper review points. Your Corporation Tax inputs are still kept.

You then put the figures back in the way you entered them the first time: import the same spreadsheet again (your account mappings are remembered), sync from Xero or QuickBooks, or type them into the grid. If last year’s period is in Tax Optimiser, Pull in Prior Year Figures on the trial balance refills the comparatives. See Getting your figures in and Import a trial balance from a spreadsheet.