FRED 82 Draft amendments to The Financial Reporting Standard applicable in the UK and Republic of Ireland
Published: 13 December 2022
Response deadline: 30 April 2023
| Title | FRED 82 Draft amendments to The Financial Reporting Standard applicable in the UK and Republic of Ireland |
|---|---|
| Format | pdf, 3.1 MB |
On this page
Overview
FRED 82 proposes a number of changes resulting from the second periodic review of FRS 102 and other Financial Reporting Standards. The proposals include: a new model of revenue recognition in FRS 102 and FRS 105; a new model of lease accounting in FRS 102; and various other incremental improvements and clarifications. The FRED is accompanied by a consultation stage impact assessment.
In developing FRED 82, the FRC has considered changes to IFRS Accounting Standards, the IASB’s proposed changes in developing the third edition of the 'IFRS for SMEs' Accounting Standard, stakeholder feedback in response to the FRC’s 2021 request for views, and other developments in corporate reporting.
As a result of the amendments set out in FRED 82, FRS 102 will reflect up-to-date IFRS-based solutions, providing high-quality and clear financial reporting to users. This will include more transparent reporting of lease obligations, as well as a clear five-step model for determining the recognition of revenue from all contracts with customers. The proposals have been designed to be proportionate to the size and complexity of the entities applying the standards.
The proposed effective date of the amendments set out in the FRED is 1 January 2025. Comments are invited in writing on all aspects of the draft amendments, including the consultation stage impact assessment, by 30 April 2023. For ease of handling, we prefer comments to be sent by email. Information on how to submit comments and the FRC’s policy in relation to responses is set out on page 345 of FRED 82.
Supporting documents
| Name | FRED 82 – at a glance |
|---|---|
| Publication date | 15 December 2022 |
| Notes | This document shows the proposals at a glance |
| Format | PDF, 280.2 KB |
| Name | FRED 82 – impact assessment Q&A |
| Publication date | 15 December 2022 |
| Type | Information sheet |
| Notes | This document sets out questions and answers relating to the consultation stage impact assessment |
| Format | PDF, 56.1 KB |
| Name | FRED 82 – FRS 102 Staff Draft |
| Publication date | 19 December 2022 |
| Notes | A Staff Draft of FRS 102 has been prepared to show the proposed amendments in context (available in the UK and Republic of Ireland only) |
| Format | PDF, 5.5 MB |
| Name | FRED 82 – launch webinar slides |
| Publication date | 31 January 2023 |
| Notes | On 19 January 2023, the FRC hosted a webinar where we gave an overview of the proposals and provided further context. (Watch the webinar below) |
| Format | PDF, 1.0 MB |
| Name | FRED 82 – launch webinar Q&A |
| Publication date | 14 February 2023 |
| Notes | This document sets out audience questions received during the webinar on 19 January 2023, and informal responses from FRC staff. |
| Format | PDF, 160.5 KB |
Podcast
Periodic Review of UK and Ireland financial reporting standards Periodic Review of UK and Ireland financial reporting standards – publication of FRED 82
Published: 15 December 2022
Director of Stakeholder Engagement and Corporate Affairs, Kate O'Neill, sits down to talk about our latest consultation on FRS 102 with our Director of Accounting and Reporting Policy, Jenny Carter and Senior Project Director, Stephen Maloney.
Webinar
On 19 January 2023, the FRC hosted a webinar where we gave an overview of the proposals and provided further context.
If you missed the webinar, you can watch it below.
Roundtables
To support the review, the FRC held a series of roundtables to discuss the lease accounting, revenue accounting, and general proposals in more depth with stakeholders to help inform responses to the consultation.
Outcome
On 27 March 2024, the FRC issued comprehensive improvements to financial reporting standards applicable in the UK and Republic of Ireland which are used by an estimated 3.4 million businesses.
The amendments are designed to enhance the quality of UK financial reporting and help support the access to capital and growth of the businesses applying them.
The changes follow extensive stakeholder engagement and consultation on the proposals with the FRC required to undertake a periodic review of FRS 102 every five years.
The most significant changes apply to leases and revenue recognition to align with recent changes to international financial reporting standards. The changes will provide better information to users of financial statements including current and potential investors and lenders. In response to stakeholder feedback, the FRC has made improvements to the proposals for lease accounting and revised the recognition exemption for leases of low-value assets to clarify that the focus is to ensure that the most significant leases are recognised on balance sheet.
The FRC has also made a number of improvements and clarifications that are designed to make it easier for preparers to apply and understand the standards. These are expected to result in a net benefit to UK businesses and contribute to high-quality, easier to understand financial reports.
Whilst there will be some implementation costs, the FRC has been mindful of the need for changes to be proportionate and to remove any unnecessary reporting burdens. During the extensive stakeholder engagement period many stakeholders, including those representing preparers, generally supported the updates to the accounting model for revenue recognition. The accompanying impact assessment sets out the expected benefits and costs of the amendments. For the most part it was not possible to quantify the benefits in a systematic manner, and so the impact assessment does not depict, in monetary terms, the FRC’s expectations of the resulting net benefits.
The amendments to the standards will in most cases be effective for accounting periods beginning on or after 1 January 2026.
| Name | Amendments to FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland and other FRSs – Periodic Review 2024 |
|---|---|
| Publication date | 27 March 2024 |
| Type | Amendment |
| Format | PDF, 31.2 KB |
| Name | Financial reporting standards: Periodic Review 2024 – Key changes |
| Publication date | 27 March 2024 |
| Type | Information sheet |
| Format | PDF, 31.2 KB |
| Name | Feedback Statement – Amendments to FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland and other FRSs – Periodic Review 2024 |
| Publication date | 27 March 2024 |
| Type | Feedback paper |
| Format | PDF, 31.2 KB |
| Name | Impact Assessment – Amendments to FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland and other FRSs – Periodic Review 2024 |
| Publication date | 27 March 2024 |
| Type | Impact Assessment |
| Format | PDF, 31.2 KB |
Implementation
In May 2024, the FRC hosted a Podcast: FRC's key changes to FRS 102 and Webinar: FRC revisions to FRS 102 - UK and Ireland accounting standards.
In September 2024, the FRC published new editions of UK and Ireland financial reporting standards. These encompass all amendments issued to date, including the Periodic Review 2024 amendments to FRS 102 and other FRSs, and provide an up-to-date reference point for each publication. The September 2024 edition of each standard is available within the UK Accounting Standards webpages.
In September and October 2024, FRC staff appeared at a number of events to promote the Periodic Review 2024 amendments. View the summary slide deck.
In November 2024, the FRC issued an updated suite of factsheets on aspects of FRS 102. The updated factsheets follow the Periodic Review 2024 amendments to FRS 102 and other FRSs, and provide additional guidance to support stakeholder reporting in accordance with specific aspects of the new requirements.
In January 2025, the FRC hosted a Webinar: How charities can prepare for major amendments to FRS 102 to discuss how the recent amendments to FRS 102 will impact UK charities and the ways they can prepare for implementation. See also the Explainer: FRS 102 Periodic Review 2024 - Considerations for charities