A capital commitment arises when the company has signed a contract to buy a fixed asset – a machine, a van, an extension to its premises – but has not yet received it at the year end, so neither the asset nor the liability is in the balance sheet. The note tells readers about money the company is already committed to spend.
What this note shows
One line, "Amounts contracted but not provided for in the accounts", with the figure at this year end and last year end. Small companies must disclose the total amount of financial commitments, guarantees and contingencies that are not included in the balance sheet (FRS 102 Section 1A, following SI 2008/409 Schedule 1). Capital commitments are one part of that.
In FRS 105 micro-entity accounts there is no separate capital commitments note; give the figure in the Guarantees and other financial commitments note instead.
Where the figures come from
The figures are typed in. Because the asset has not been received, nothing is in the trial balance. Use the signed contracts or purchase orders in place at the year end, less any amounts already paid or accrued. Exclude assets the directors merely plan or have budgeted to buy.
In the demo, Example Notes Ltd had signed a contract for £25,000 of capital expenditure at 31 March 2026 and had none at 31 March 2025.
Completing the note in Tax Optimiser
Open the period, choose View Accounts, then Notes in the left Actions menu. Under Capital commitments, select Capital commitments.
- Set Show this note in the accounts to Yes.
- Enter Amounts contracted but not provided for under Current Year and Last Year.
- Optionally switch on Additional note for Capital commitments and apply a template.
- Click Save changes to save the note and rebuild the accounts preview.
Wording templates
On the Additional note for Capital commitments section:
- Contracted but not provided – a sentence stating the capital commitments at the year end. You are asked for {{CommitmentAmount}}; the year-end date is filled in for you.
- No capital commitments – states that the company had no capital commitments at the year end. Nothing to enter.
The table already shows the amount, so the "Contracted but not provided" sentence repeats it. Use it if you prefer the words alongside the figure, or use the additional note to say what the commitment is for (for example "for new production equipment").
How it appears in the accounts
The note prints the line "Amounts contracted but not provided for in the accounts" with a £ figure for each year (a dash for nil), double underlined, followed by any additional note text.
Frequently asked questions
What counts as a capital commitment?
Expenditure on fixed assets that the company has contracted for – signed an order or contract – but not received or recorded by the year end. Plans and budgets that have not been contracted do not count.
Is the capital commitments note compulsory for small companies?
Small companies must disclose the total of financial commitments not included in the balance sheet. If the company has capital commitments, include them. If it has none, the note can be left off or the "No capital commitments" template used.
Should I include the VAT?
Show the amount the company is committed to pay that will be capitalised. If the company is VAT-registered and can recover the VAT, the commitment is normally shown net of VAT.
Where do I put capital commitments in micro-entity accounts?
In FRS 105 accounts, use the "Capital commitments" section of the Guarantees and other financial commitments note, which prints beneath the balance sheet.