SCOTTISH property businesses are being urged to make sure their lending arrangements are fully up to speed with recent changes to the financial reporting framework, which governs the basis of how companies prepare their accounts.
Explains a spokesperson for accountants, Chiene + Tait: “The micro entity accounting regime was launched earlier this year to make it simpler for small businesses to present their financial data.
“In theory, this is a good thing for small business owners – there’s less disclosure required, with only the balance sheet (with limited notes) should be sent to Companies House.
“And property businesses need to confirm whether their banks accept micro entity accounts, because more complex accounts could involve more cost and time.”
Jeremy Harper, director at Chiene + Tait, comments: “Bank managers, for instance, will start to see micro entity accounts for the first time and will require to understand how the new accounting regulations work.
“In particular, under the micro entity regime, properties will be included at cost rather than market value.
“It’s important that the validity of this new regime is widely recognised. Were a bank, say, to consider micro entity accounting information to be insufficient, access to finance could be restricted or worse, recalled.”
Jeremy continues “Property companies, which rely upon their assets to leverage financial support for expansion, need to be particularly mindful. If your business falls within this sector and you are interested in, or considering, micro entity accounting, speak to your advisor who should be able to support discussions with your lender.”
Notes to editors:
Jeremy Harper was promoted to the role of audit director in June 2015. He qualified as a chartered accountant with a mid-tier Edinburgh firm before joining Chiene + Tait in May 2011. Since joining, Jeremy has progressed to the position of director within the Audit Assurance Department and has a varied audit portfolio with charities, business owners and independent schools.
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