Technical update: What you need to know this month

By ICAS Editorial team

17 August 2015

Watch this month's technical update video from James Barbour, ICAS Director of Technical Policy, covering key changes to UK GAAP and international financial reporting updates.



This month's update video includes information on:

UK Financial Reporting

New UK GAAP - FRC Changes to New UK GAAP

As expected FRC has now finalised its new UK GAAP standards for smaller entities and micro entities.
There is a new section, 1A of FRS 102 that applies to smaller entities:

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FRS 105 details the accounting requirements for micro-entities:

Download the PDF

No fully revised FRS 102 has yet been published by the FRC since August 2014, though a fully revised version incorporating section 1A will be published later this year.

Key Features of New Smaller Entity Regime

  • Effective for accounting periods beginning on or after 1 January 2016, with early adoption permitted for accounting periods beginning on or after 1 January 2015. 
  • Section 1A sets out the presentation and disclosure requirements applicable to small entities based on the new small companies regime within company law, whilst the recognition and measurement requirements of FRS 102 will also apply. 
  • Small entity accounts are still required to show a true and fair view although the law only mandates specific disclosures (Appendix A to Section 1A).

Key Features of FRS 105 – Micro-entities

  • Effective for accounting periods beginning on or after 1 January 2016, with early adoption permitted for accounting periods beginning on or after 1 January 2015. 
  • Very simplified accounts requirements for such entities – measurement of all assets and liabilities at cost (no fair values or revaluation), simplified accounts formats, no deferred tax and minimal disclosure notes. 
  • True and fair view – satisfied by meeting the prescribed legal requirements 
  • Micro-entity regime is optional. Adoption needs to be given proper consideration.

Micro-entities

FRS 105 The Financial Reporting Standard Applicable to Micro-Entities

Small entities

FRS 102 including section 1A – presentation and disclosure for small entities

Entities not required to apply IFRS (e.g. medium and large private companies)

FRS 102

Subsidiaries of groups applying IFRS

FRS 101 reduced disclosure framework

Subsidiaries (and ultimate parents) of groups

FRS 102 - Reduced disclosures for subsidiaries and ultimate parents

Companies listed on EU-regulated markets (consolidated accounts)

EU-endorsed IFRS


IFRS

The International Accounting Standards Board (IASB) has confirmed a one-year deferral of the effective date of the revenue Standard, IFRS 15 Revenue from Contracts with Customers, to 1 January 2018.

It is consulting on some proposed clarifications to and transition reliefs in the standard including identification of performance obligations in a contract and determining whether an entity is acting as principal or agent.

Consultation deadline is 28 October 2015. IASB expects to complete its discussions on these issues by the end of 2015.

EU Audit Legislation

BIS, FRC, FCA and PRA consultations will be issued late September/early October.

Topics

  • Corporate and financial reporting
  • Audit and Assurance

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