The turnover note lets you explain what the company's turnover is made up of. Small companies don't have to give it, but it helps readers when turnover comes from more than one source.
What this note shows
Turnover is the income from the company's ordinary activities, such as sales of goods or services, less trade discounts and VAT. The note describes where that income comes from, and many preparers add the amounts with comparatives.
Small companies are not required to analyse turnover by activity or by market, so this note is optional in FRS 102 Section 1A accounts. It is off until you switch it on. FRS 105 micro-entity accounts don't have it.
Where the figures come from
This is a text note. Tax Optimiser doesn't read any figures into it from the trial balance. Whatever you type prints as written. If you quote amounts, check that they add up to the turnover line in the profit and loss account. In the demo, sales of £640,000 and rental income of £18,000 make up turnover of £658,000.
The accounting policy explaining when turnover is recognised belongs in the accounting policies, not in this note. See Accounting policies.
Completing the note in Tax Optimiser
Open the period, choose View Accounts, then Notes in the Actions menu on the left. Select Turnover, set Show this note in the accounts to Yes and type your wording, or click Use Template to start from the standard text.
Click Save changes to save the note and rebuild the accounts preview.
Wording templates
- Turnover – a general paragraph saying that turnover is revenue from the sale of goods or services after trade discounts and VAT, and when it is recognised. It has no placeholders. Read it through and finish or adjust the final sentence so it describes when your company recognises turnover.
Applying the template replaces whatever is in the box.
How it appears in the accounts
The text prints under the heading "Turnover". In the demo accounts it is note 4, because note 3 is the accounting policies.
Frequently asked questions
Do small companies have to include a turnover note?
No. Small companies don't have to analyse turnover. Include the note if it helps the reader, for example when the company has more than one source of income.
Does the turnover note update when I change the trial balance?
No. It is a text note, so any amounts are typed by you. Update the wording if turnover changes.
Should rental income be included in turnover?
If letting property is part of the company's ordinary activities, rent is usually turnover. If it is incidental, it is usually other operating income. Agree the presentation with your accountant, and make sure the note matches the profit and loss account.
Where do I put the turnover recognition policy?
In the accounting policies, which print as note 3 in FRS 102 Section 1A accounts.
Where to go next
- Guide to the notes to the accounts – how the Notes screen works
- Previous: Compliance with accounting standards note
- Next: Operating profit note
- Notes in FRS 102 Section 1A accounts