What balance sheet total must not be exceeded for a micro-entity?

The designation of a micro-entity is based on specific financial thresholds set out in legislation, particularly in the context of UK accounting regulations. For a company to qualify as a micro-entity, it must meet two out of three criteria regarding turnover, balance sheet total, and the number of employees.

The balance sheet total for a micro-entity must not exceed £316,000. This figure is significant because it reflects the upper limit of total assets that a company can have while still benefiting from the simplified accounting and reporting regime designed for small businesses. This regime allows micro-entities to produce less detailed financial statements, thereby reducing the administrative burden on very small companies.

In contrast, the other figures provided either do not meet the micro-entity threshold or apply to different categories of small entities. Understanding these limits is crucial for financial reporting compliance, allowing businesses to take advantage of the simplified processes available to micro-entities.