The impact of FRS102

UK and Irish accounting standards are in the midst of the most significant overhaul for decades. From 2016, previous standards are being replaced by a single new standard, FRS 102, which is based on more complex international accounting standards. The introduction of FRS 102 will mean changes to accounting treatment that could have a substantial impact on your own accounts.

We have published further guidance for service, manufacturing and property management companies.

Click here if you are a:

Service business

Manufacturing business

Property Management Company

For further information about how FRS102 will affect your business, please contact Martin Wharin, Business Services Partner at Hart Shaw on 0114 251 8850 or martin.wharin@hartshaw.co.uk.

An end to FRSSE

Sheffield based Chartered Accountants, Hart Shaw has welcomed news that the Financial Reporting Council (FRC) has issued a number of changes with the aim of simplifying the reporting of company accounts.

FRSSE is no more and according to the FRC, the changes – which are effective from 1 January 2016 – are largely in response to the implementation of the new EU Accounting Directive. They include:

• A new standard – FRS 105; the Financial Reporting Standard applicable to the Micro-entities Regime
• A new section – 1A Small Entities of FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland

The FRC has also published an Overview of the Financial Reporting Framework, which describes the framework applicable for accounting periods beginning on or after 1 January 2016 and includes key differences between the FRSSE and the new requirements set out in FRS 105 and section 1A of FRS 102.

Martin Wharin, Business Services Partner at Hart Shaw said: “These changes to accounting standards will have a positive impact upon small businesses. I believe that they will effectively cut red tape for small companies. They also respond to the new legal framework for disclosure in small company reporting, providing guidance for applying it and improving transparency relating to financial instruments.

“In addition, they play a role in improving the cost-effective reduced disclosure framework for listed groups by permitting International Financial Reporting Standards-based presentation requirements in subsidiaries’ financial statements,” Martin added.

The FRC added that it expects to issue revised editions of FRS 100, Application of Financial Reporting Requirements, FRS 101, Reduced Disclosure Framework, and FRS 102, in September.

If you would further information please contact Martin on 0114 251 8850 or martin.wharin@hartshaw.co.uk.

 

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Is your SME ready for FRS102?

Small and medium-sized enterprises (SMEs) are reminded that a new accounting standard could affect their financial affairs.

The proposed changes of the new UK GAAP [Generally accepted accounting principles], known as FRS102, will align the requirements of FRS102, which is generally used by smaller firms, with those of the relevant International Financial Reporting Standard; as used by larger organisations.

The Financial Reporting Council (FRC) said the changes were needed as the complexity of the existing rules had led to ‘potential unintended consequences’ which meant that they were not only more arduous to apply, but they could also result in ‘inappropriate accounting outcomes’.

The FRC has launched a consultation on amendments to accounting standard FRS102 in a bid to simplify rules surrounding share and share option awards for smaller firms. In its draft, called FRED61, the FRC has set out amendments to the standard, which deals with share-based payment transactions with cash alternatives. The FRC is looking to make the changes for accounting periods beginning on or after 1 January 2015. When a business adopts FRS 102, comparative accounts for the year prior to conversion will also be needed. The comment period on this proposal closes on 1 June 2015.

For more information please Martin Wharin, Business Services Partner on T: 0114 251 8850 or email: martin.wharin@hartshaw.co.uk.

 

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