With many practitioners gearing up for the move across to FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland, the Financial Reporting Council (FRC) are keen to receive feedback on the implementation of the standard.
It is expected that there will be plenty of questions on implementation of the standard, certainly in the first couple of years. In complex situations it may be advisable to seek advice from the technical advisory department, or from a reputable training organisation as mistakes in interpretation can be both embarrassing and costly.
Some key differences to watch out for on implementation of the new standard (of which there are several articles outlining these differences) are in relation to:
- – Accounting policies
– Deferred tax
– Cash flow statement
– Employee benefits
– Financial instruments (loans at below market rate among related parties is becoming a big issue)
– Foreign currency (no use of contracted rates)
– Intangible assets and goodwill (be careful with the ten-year amortisation rule in FRS 102)
– Investment property
– Revenue recognition (this is more to do with the relaxed terminology; revenue recognition practices should not change from previous UK GAAP)
Review of FRS 102
The FRC are seeking views from practitioners on FRS 102 which they can use to inform the development of proposals for change. Any changes will be subject to a formal consultation, which is expected to be at some stage in 2017 in advance of a planned ‘effective from’ date of 1 January 2019. This review will take on board feedback from accountants in terms of:
- – what went well;
– what didn’t go so well;
– what could be improved within the standard; and
– areas of the standard that prove challenging.
The FRC have created an e-mail address where you can send feedback which is firstname.lastname@example.org and the comments the FRC receive will be used to inform the development for proposals for changes to the accounting standard.
Comments can be provided to the FRC at any time during the triennial process and those which are received by 31 October 2016 will be taken into consideration during the formal proposals for change. Comments which are received post 31 October 2016 will be considered at a later stage in the review process.
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Steve Collings is the audit and technical partner at Leavitt Walmsley Associates Ltd.