For periods beginning on or after 1 January 2016 the rules governing financial reporting for small & medium entities have changed.
Your December 2015 year ends have now passed and if you haven’t already, you will soon come to prepare your first set of FRS 101 & 102 accounts.
After much consultation and debate, standards based on IFRS (specifically IFRS for SMEs) are now set to affect a much wider spectrum of businesses with the introduction of New UK GAAP FRS 101 - 105:
- FRS 101: Subsidiary and parent members of group companies who currently adopt full IFRS will have to comply with a cut-down version of IFRS - namely FRS 101 Reduced Disclosure Framework. The change will primarily affect corporate accountants. The reduced disclosures available in FRS 101 may deliver efficiency savings when preparing year end accounts, without having a negative impact on the quality of the financial reporting.
- FRS 102: Qualifying small and medium-sized businesses will have to comply with FRS 102, which applies to unlisted companies and subsidiaries of listed companies, as well as to public benefit entities such as charities. The change will mostly affect accountants in practice. Small companies will have the option of preparing financial statements in accordance with Section 1A of FRS 102 Small Entities, which outlines the presentation and disclosure requirements for a small company’s financial statements; although recognition and measurement of amounts in the financial statements of a small entity will be in accordance with full FRS 102
- FRS 103: Is a specialist standard for insurance contracts
- FRS 104: Covers interim financial reporting
- FRS 105: New micro entity regime
The new reporting standards should be considered as completely new accounting frameworks, not just a shift in accounting policy. They introduce many changes that accountants need to understand and for FRS101 and FRS102 take effect for periods beginning on or after 1 January 2015. FRS102 Section 1A & FRS105 for small and micro-entities of course take effect for periods beginning on or after 1 January 2016.
What is it that you are looking for?
The latest IRIS FRS guide reveals how the introduction of FRS 101 and 102 is affecting corporate accountants and accountants in practice
Download this guide to uncover some of the issues that accountants are facing when adopting FRS and how working within the new framework is changing business relationships. It also outlines the support available from IRIS to smooth your transition, whether you use IRIS software or not.