Companies Act 2014 section 354

Abridged financial statements for a medium company

Section 354 sets out the rules for how a medium-sized company may prepare abridged financial statements for public filing, allowing it to combine certain revenue and cost items into a single "gross profit or loss" line rather than disclosing them separately.

• A medium company's abridged financial statements are the same as its full statutory financial statements, except that the profit and loss account (or income statement) and related notes may be condensed
• The key simplification allowed is that revenue and certain cost items may be merged into a single line headed "gross profit or loss", avoiding separate disclosure of turnover and cost of sales
• The rules differ slightly depending on whether the company prepares its accounts under IFRS or under Companies Act formats, but the principle of combining revenue with direct costs into one figure is the same
• Where items are combined on the face of the profit and loss account, the related notes may also be abridged so that those combined items do not need to be separately identified

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