FRS 102

FRS 102 is one of three new accounting standards which will replace the existing UK accounting requirements from January 2015.  It is applicable to entities which are required to prepare true and fair accounts but which choose not to adopt International Accounting Standards and do not qualify as small under the current Companies Act. It will apply to accounting periods beginning on or after 1 January 2015.

Companies, LLPs and not-for-profit entities will have to present their accounts in accordance with the new rules. This is likely to change how they classify and value various items and when they recognise them in their accounts. The extent and magnitude of the changes will depend on the size and nature of the entity affected. While the impact may be largely presentational for some entities, for others there could be significant differences to their reported results and/or balance sheet.

FRS 102 is retrospective and so affected entities will have to restate their comparative figures as if the rules had always applied. While there are some exemptions and exceptions, all entities are likely to have to restate prior year information to some extent. The crucial date for the restatement is the beginning of the comparative period (the “transition date”). For companies with a 31 December year end the transition date will be 1 January 2014 and so they will need to obtain certain information as at this date. Some of that information may not be available retrospectively.

We can help identify whether you are caught by FRS 102, your transition date, the key potential changes to your current figures and the choices available to you at transition. We can also help you assess the practical commercial implications of presenting your annual results on a new basis.

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