In 2012 and 2013 the FRC revised financial reporting standards in the UK and Republic of Ireland. The revisions fundamentally reformed financial reporting, replacing almost all extant standard with three Financial Reporting Standards:
FRS 100 Application of Financial Reporting Requirements
FRS 101 Reduced Disclosure Framework
FRS 102 The Financial Reporting Standard Applicable in the UK and Republic of Ireland
Impact Assessment: FRS 100, FRS 101, FRS 102
Feedback Statement: FRED 46, FRED 47, FRED 48
In addition the FRSSE
continues to be available for small entities.
FRS 102 - Editorial Amendments and Clarification Statements
As the transition date of FRS 102 approaches, the FRC is beginning to consider queries arising from its implementation. The FRC has issued editorial amendments or clarification statements relating to FRS 102 on the following topics:
Date of issue
Section of FRS 102
2 Aug 2013
Section 1 Scope
The early application of FRS 102 by entities within the scope of a SORP
12 Nov 2013
Section 12 Other Financial Instruments Issues
Net investment hedges of foreign operations that are branches
12 Nov 2013
Section 29 Income Tax
Deferred tax arising on a business combination
The FRC intends to include such matters in one compendium for ease of reference. The detail of the above statements can be accessed here.
New UK GAAP Launch Event - 15 May 2013
The FRC and the ICAEW's Financial Reporting Faculty held an event on 15 May 2013 marking the recent publication of FRS 102. A summary note from the event is available here
The FRC issued FRED 51: Draft Amendments to FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland Hedge Accounting on 15 November 2013. The comment period closes on 14 February 2014.
The amendments to FRS 102 are proposed to be effective from 1 January 2015. FRED 51 contains transitional provisions for existing hedging relationships, where the entity does not meet all the qualifying conditions on the date of transition. For example, hedge accounting is not precluded from the date of transition, if the documentation and designation of the hedging relationship is completed after transition, provided designation and documentation apply as at the date of transition.
The FRC issued FRED 49: Draft FRS 103 Insurance Contracts on 29 July 2013. The comment period closes on 31 October 2013. FRED 49 and the accompanying draft Implementation Guidance are available here.
The FRC issued FRED 50 Residential Management Companies' Financial Statements on 5 August 2013. The comment period closes on 11 November 2013. FRED 50 is available here.
See Developments by Month 2013 for details of issues considered at Accounting Council meetings.
The Accounting Council and its UK GAAP Technical Advisory Group will review any issues arising relating to the implementation of FRS 102, as they arise. Decisions will be taken on a case-by-case basis about the best way to address issues such as editorial points, areas where FRS 102 is silent and areas where divergence in accounting practice seems to be emerging. However, other than in relation to financial instruments, the FRS does not expect to revise FRS 102 before the first three-year review.
SORPs and new UK GAAP
As a result of the issue of the new UK accounting standard FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland
by the FRC in March 2013, seven out of the eight existing SORP making bodies are currently updating their relevant SORP. The insurance sector SORP issued by the Association of British Insurers is expected to be withdrawn once the new accounting standard, FRS 103 Insurance Contracts
, is issued by the FRC.
A summary of the current status of SORPs can be accessed here
On 2 August 2013, the FRC issued a clarification statement relating to the early application of FRS 102 by entities within the scope of a SORP. This statement can be accessed here.
Future development of FRS 102
he FRC announced at the New UK GAAP launch event that it plans to carry out the first three year review of FRS 102 in 2016/17 with a view to the revised FRS 102 being effective in 2018.
The FRC plans to issue exposure drafts amending FRS 102 in relation to hege accounting and impairment of financial assets when the IASB finalises IFRS 9 Financial Instruments
For details of the exposure drafts and other previous consultations leading to the developments of the new UK accounting standards see here.
For advice on how to implement go to: www.newukgaap.co.uk (please be advised this is an external site)
If you would like to discuss any matters relating to UK accounting standards please contact:
Jenny Carter, Lead Project Director: email@example.com
Mei Ashelford, Project Director: firstname.lastname@example.org
Susanne Pust Shah, Project Director: email@example.com