Question to the Department for Business and Trade:

To ask the Secretary of State for Business and Trade, what estimate he has made of the average annual cost to businesses of transitioning from small to medium-sized company status due to accounting changes under FRS 102; and what assessment he has made of the potential impact of those costs on SMEs.

FRS 102 is issued by the Financial Reporting Council (FRC) and the responsibility for any detailed assessment of the impact of changes in FRS 102 rests with the FRC. Impact assessments are available on the FRC’s website: Impact Assessments and Feedback Statements. In relation to recent changes arising from the Periodic Review 2024 the FRC considered the effect of companies potentially moving from small to medium-sized and estimated at the time that a limited number of small entities could move above the small company threshold as a result. Since then, the Government has significantly increased the monetary company size thresholds, and this will reduce the number of entities affected by this interaction.