FRS 102 is the primary accounting standard that is applicable to entities not adopting IFRS, FRS101 or FRS105. FRS 102 sets out requirements which are based on IFRS, but which have important differences from both previous UK accounting standards and IFRS.
FRS 102 came into effect for accounting periods commencing on or after 1 January 2015 and can be applied by entities which are not required to apply IFRS, small entities and micro entities.
Small entities can also apply FRS 102 Section 1A and micro entities can also apply FRS 102 Section 1A or FRS 105.
Are reduced disclosures available?
Reduced disclosures are available for the individual accounts of qualifying subsidiaries and parents. Section 1A Small Entities sets out the different presentation and disclosure requirements available to small entities. One of the main criteria is that the company is required to be small or a holding company for a small group. The limits to be classified as small are:
|Requirement||Small Company||Holding company for Small Group|
|Turnover||< 10.2 Million||< 10.2 Million-net|
< 10.2 Million-gross
|Balance Sheet Total (total Assets)||< 5.1 Million||< 5.1 Million-net|
< 6.1 Million-gross
|Number of Employees||< 50 Employees||< 50 Employees|
Are there any changes coming up?
The financial reporting council finished their first triennial review in December 2017, resulting in a revised edition of FRS102 being published in March 2018. The changes published need to be adopted for all accounting periods starting after 1st January 2019; however early adoption can be taken.
There are five key changes introduced, which are:
- Loans from directors or close family members can be measured at transaction cost (small entities only)
- Undue cost and effort exemption have been replaced with accounting policy choice
- Greater flexibility in the number of intangibles that need to be recognised on a business combination
- Classification of financial instruments
- Change in the definition of a financial institution.
These changes are discussed in more detail here:
Less well-known changes in the Triennial review:
Further to the five main changes, there are some more minor changes as a result of the Triennial Review 2017 which are outlined below.
- A reconciliation of net debt must be presented
- There is no need to disclose the amount of stock recognised as an expense during the period.
- The only financial instruments required to be disclosed are those measured at fair value through profit or loss.
- There is now an exemption from disclosing remuneration paid to key management personnel
- Replacement parts for PPE must be derecognised when used (even when not depreciated separately)