FRC defers decision to update FRS 102
In September 2016 the Financial Reporting Council (FRC) published a consultation document containing proposals to update FRS 102.
‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ was to be updated to reflect changes in International Financial Reporting Standards (IFRSs).
The document provided an outline timetable for possible changes in relation to financial instruments, revenue and leases which are covered by IFRSs 9, 15 and 16.
The FRC received feedback which showed support for the long-term aim of broad consistency with IFRSs. However, respondents questioned the proposed timetable and suggested that more implementation experience would be beneficial before the IFRSs are considered for incorporation into FRS 102.
Decision to postpone
The FRC has agreed that further evidence-gathering and analysis needs to be undertaken before any proposals are made to reflect the principles of IFRSs 9, 15 and 16. Therefore, the FRC has decided not to issue a triennial review phase 2 exposure draft this year to update FRS 102.
IFRS 17 – Insurance Contracts has been issued since the consultation began in September 2016. The FRC had previously stated that FRS 103, Insurance Contracts would be reviewed once the International Accounting Standards Board (IASB) had completed IFRS 17.
The FRC still intends to review FRS 103 at a suitable time, but, as with the approach to the other major new IFRSs, this is likely to take place when more IFRS implementation experience is available. There is no target effective date yet for any changes to FRS 102 or FRS 103 and the FRC will ask for comments on detailed proposals in due course.