FRSSE is a simplified UK accounting standard for small companies, and for small organisations that would be small companies is they were incorporated.
The definition of small companies is that used in the Companies Act. Some companies may not use FRSSE even if they meet its size requirements: for example banking, insurance and some other finance and investment businesses, as well as public companies.
The simple nature of FRSSEs and the audit exemptions for small companies means that the UK has fairly minimal reporting requirements, and costs, for smaller companies.
The existence of FRSSE means that the UK has three sets of accounting standards:
- FRSSE for smaller entities,
- a more complex GAAP for larger organisations,
- IFRS for listed companies.