UK GAAP

The financial reporting and accounting requirements in the UK and the Republic of Ireland have fundamentally changed as a result of the Financial Reporting Council (FRC) issuing the new FRS 101 Reduced Disclosure Framework and FRS 102 The Financial Reporting Standard Applicable in the UK and Republic of Ireland, which have replaced the old FRSs, SSAPs and UITFs previously in issue (“old UK GAAP”).

Companies face the challenge of converting from old UK GAAP to FRS 101 or FRS 102, which will likely result in changes to recognition and measurement requirements, as well as disclosure requirements. Crucially, these changes could impact key performance indicators such as profitability, key ratios such as gearing and the ability to pay dividends.

We can help you understand the new requirements and explain how they will impact your business.

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

This standard is the single financial reporting standard that replaces old UK GAAP and applies to the financial statements of entities that are not applying IFRS, FRS 101 or the FRSSE.

This standard sets out requirements which are based on IFRS, but which have important differences between both old UK GAAP and IFRS.

FRS 101 Reduced Disclosure Framework

This standard sets out the disclosure exemptions for the individual financial statements of subsidiaries, including intermediate parents, and ultimate parents that otherwise apply the requirements of IFRS.

All entities currently applying old UK GAAP will be required to transition to a new financial reporting framework for accounting periods beginning on or after 1 January 2015. This means that the first sets of new financial statements will be for the year-ending 31 December 2015. However, as entities are required to present comparative information and a reconciliation of opening equity under the new requirements, the first transition dates will be 1 January 2014.

Early adoption of both FRS 101 and FRS 102 is allowed, and there may be accounting, tax or resource availability reasons for choosing to transition early.

FRSSE

The Financial Reporting Standard for Smaller Entities (FRSSE) was updated for accounting periods beginning on or after 1 January 2015 following the issue of these new standards, but has now been withdrawn.

All entities currently applying the FRSSE will therefore be required to transition to a new financial reporting framework for accounting periods beginning on or after 1 January 2016, with micro entities having the additional option of transitioning to FRS 105 The Financial Reporting Standard applicable to the Micro-entities Regime.

We have helped many businesses with transitioning to FRS 101 and FRS 102, as well as advising numerous companies on the impact of the new accounting and financial reporting requirements.

For companies transitioning to FRS 101 or FRS 102, we can help you to:

  • conduct summary framework considerations and implications assessments;
  • conduct detailed impact assessments;
  • provide project management services for transition;
  • prepare and/or review compliant financial statements;
  • prepare and/or review accounting policies and manuals and group reporting requirements; and
  • provide and/or explain the requirements of disclosure checklists.

We can also provide technical advice on any of these issues, as well as bespoke training courses designed for boards and/or finance teams.

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