FRS 102 is the main UK accounting standard; FRS 105 is a simpler version for micro-entities. This guide explains the difference and which applies to your company.
Published July 2026 · Updated July 2026
These are the core UK GAAP standards. FRS 102 sets out how most UK companies measure and present things like revenue, assets, accruals and leases. FRS 105 is a simplified version designed for micro-entities.
It comes down to size. A micro-entity (meeting limits on turnover, balance sheet total and employees) can use FRS 105, with fewer disclosures and simpler treatments. Larger small companies use FRS 102.
FRS 105 removes options and disclosures to cut the burden, for example it does not revalue assets or recognise deferred tax. FRS 102 is fuller and gives a more detailed picture, which larger companies and their lenders often need.
A very small company meeting at least two of: turnover under a set limit, a small balance sheet total, and few employees. Such companies can use FRS 105.
Yes. Some micro-entities choose FRS 102 for a fuller picture, for example if lenders or investors want more detail.
Good software produces accounts in the right format for your chosen standard. Your accountant confirms the treatment.
Source: Financial Reporting Council ↗. This glossary is written for small business owners, so definitions are simplified. Tax rates and thresholds reflect 2026/27 UK rules and change over time. Berified does not provide accounting, tax or legal advice; always check the source or a qualified adviser.