Differences between UK and Ireland financial reporting standards and IFRS Accounting Standards

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Introduction

The following table describes the relationships between UK and Ireland financial reporting standards and IFRS Standards.

FRS 100 Application of Financial Reporting Requirements

The requirements in FRS 100 are not based on any IFRS Standard.

FRS 101 Reduced Disclosure Framework

Financial statements prepared in accordance with FRS 101 are Companies Act accounts, not IAS accounts. FRS 101 provides a reduced disclosure framework for qualifying entities, by providing exemptions from certain disclosure requirements of IFRS Standards.

FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland

The requirements in FRS 102 are based on the IFRS for SMEs Accounting Standard, with some significant amendments made for application in the UK and Republic of Ireland.

FRS 103 Insurance Contracts

The requirements in FRS 103 are based in part on IFRS 4 Insurance Contracts. Significant differences between FRS 103 and IFRS 4 are set out in the Basis for Conclusions to FRS 103. In particular:

  • As set out in paragraph 7 of the Basis for Conclusions, in seeking an IFRS-based solution, IFRS 4 was used as a basis for FRS 103. However, it was noted that IFRS 4 does not set specific requirements for the underlying recognition and measurement of insurance contracts, reflecting the fact that it was an interim standard issued by the International Accounting Standards Board (IASB) to facilitate harmonisation between jurisdictions pending completion of the second phase of its insurance contracts project. Therefore in developing FRS 103, the text of IFRS 4 was supplemented with some of the existing requirements and practice in accounting for insurance contracts in the UK and Republic of Ireland.
  • As set out in paragraph 26 of the Basis for Conclusions, there are a small number of areas where IFRS 4 conflicts with the requirements of Schedule 3 to the Regulations, and therefore in developing FRS 103 amendments were made to the text from IFRS 4 to ensure compliance with company law. The three principal examples are:
    • Equalisation provisions.
    • Equity treatment for discretionary participation features.
    • Discounting.

FRS 103 is not based on IFRS 17 Insurance Contracts, which was effective for annual reporting periods beginning on or after 1 January 2023. As set out in paragraph 57A of the Basis for Conclusions, the FRC is likely to wait for several years’ implementation experience before considering alignment.

FRS 104 Interim Financial Reporting

The requirements in FRS 104 are based on the IASB’s IAS 34 Interim Financial Reporting. Significant differences between FRS 104 and IAS 34 are set out in the Basis for Conclusions to FRS 104. In particular, as set out in paragraph 10 (of the Basis for Conclusions):

  1. Disclosures that are not required by FRS 102 have been deleted. For example, certain fair value disclosure requirements that apply under IAS 34 have not been repeated in FRS 104.
  2. Some disclosure requirements, for example those in relation to fair value measurements and business combinations, apply only if the entity would be required to make the same disclosures in the annual financial statements.
  3. Related party disclosures may be omitted for transactions between wholly-owned members of a group since FRS 102 exempts such transactions from disclosure in the annual financial statements.
  4. Disclosure requirements that apply when an entity adopts a new financial reporting framework for the first time have been inserted. Similar disclosures are required under IFRS Accounting Standards, although they are not part of IAS 34.
  5. The annual financial statements disclosure requirements in paragraph 26 of IAS 34 concerning significant changes in estimates reported in an interim period have been deleted because FRS 104 addresses only reporting requirements in interim financial reports.
  6. FRS 102 permits the presentation of simplified primary financial statements in certain circumstances. These presentation requirements have been included in FRS 104 to ensure consistency of presentation in the annual and interim financial statements.
  7. Entities that are not required to present a cash flow statement in the annual financial statements are also exempt from this requirement in the interim financial report.
  8. The principle that the frequency of reporting should not affect the measurement of the annual results has been qualified when FRS 102 would prohibit a reversal of an impairment charge. This is consistent with the requirements in IFRIC 10 Interim Financial Reporting and Impairment.
  9. The preparation requirements in paragraph 14 of IAS 34 pertaining to consolidated interim financial reports have been deleted, because entities that apply FRS 104 will generally prepare entity-only annual financial statements and interim financial reports.

FRS 105 The Financial Reporting Standard applicable to the Micro-entities Regime

The requirements in FRS 105 are based on FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland, adapted for entities following the micro-entities regime. The requirements in FRS 102 were based on the IFRS for SMEs Accounting Standard, with some significant amendments made for application in the UK and Republic of Ireland, as set out above. The Basis for Conclusions to FRS 105 provides more information about how FRS 105 was developed.

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