TT206: FRS 102

September 22, 2014
FRS 102

As you are probably aware big changes in the world of accountancy are almost upon us.  New accounting standards will have to be adopted for 2015 or 2016 depending on your company’s year end.

In November 2012 Financial Reporting Standard (“FRS”) 100 Application of Financial Reporting Regulations and FRS 101 Reduced Disclosure Framework were introduced, with the main standard FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland issued in March 2013.

The main standard that will affect most entities (unless you are listed for example) is FRS 102.  FRS 102 will replace all existing UK accounting standards, including existing FRSs, UITFs and SSAPs.  FRS 102 is effective for accounting periods beginning on or after 1 January 2015 and it also requires the comparative figures to be restated, so if you have a 31 December year end, then your accounts for the year ending 31 December 2015 will be prepared under FRS 102.  However, the comparative figures for the year ending 31 December 2014 will require restatement as if they too had been prepared under FRS 102.  This will of course require some thought and consideration.

Without going into the technical aspects too much, FRS 102 may have some significant impacts upon your accounts.  So, do you have any of the following:-

  • Loans that carry no interest or have preferential rates of interest?
  • Intercompany, shareholder or director loans that have either no formal rates of interest charged, no formal agreements in place or repayment terms are unknown?
  • Property or equipment included in the accounts at valuation?
  • Property that is let to another group company?
  • Intentions to make business acquisitions on or after your transition date?
  • Any intangible assets?
  • Any goodwill?
  • A defined benefit pension scheme?
  • Employees that do not always take all their holiday entitlement?
  • Operating leases – be it for offices, machines etc.?
  • Listed investments?

The above list is by no means exhaustive, but provides some food for thought as some points may require you to take action – i.e. getting appropriate valuations, forming agreements, being more robust in accounting for certain items etc.

Should you wish to discuss the impact of the new Financial Reporting Standards then your Barnes Roffe contact partner will be happy to discuss your particular situation with you, how you will be affected and how best to proceed.

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