Abbreviated accounts were formerly a simplified form of annual accounts that small qualifying companies could file under the Companies Act to cut costs and save time, while minimizing the disclosure of business information.
Abridged accounts are a simplified form of annual accounts allowed under the EU Accounting Directive (2014) for entities qualifying as small companies. These accounts exclude certain detailed financial information from both the balance sheet and profit and loss statement, provided this exclusion is unanimously agreed upon by shareholders.
The Accounting Directive (2014/95/EU) aims to simplify the disclosure requirements for small companies, notably through the introduction of abridged accounts, and includes special rules for micro-entities. The directive was incorporated into UK law in 2015 and applies to financial periods beginning on or after 1 January 2016.
Under UK company law, a small company is a private company satisfying certain criteria related to net worth, turnover, and the number of employees.
