Think you’ve mastered FRS 102? We have news for you…
Many practitioners have spent the last year getting to grips with the no longer ‘new UK GAAP’ requirements of FRS 102. The changes to the treatments of deferred tax, loans, revaluations etc have had us all scratching our heads but at least now we should be happy that we have conquered the new standard. All we need now is a nice long period of calm with no changes…
When the original standard was issued in 2013, the published plan was to review FRS 102 every three years, so consultations on changes are now technically due. Unfortunately, most of us have only recently adopted FRS 102, or in fact are only just about to do so, so the fact that it has already been around for three years has gone under the radar.
The suggested amendments come from the fact that some of the full IFRSs have already been altered and so FRS 102 needs to fall in line. However, the Financial Reporting Council (FRC) also says that feedback received from existing users of FRS 102 is taken into account for proposed improvements.
The FRC published two Financial Reporting Exposure Drafts (FRED) during 2017. These are known as phase 1 and phase 2.
Briefly the changes proposed are:
Standard | Phase 1 | Phase 2 |
---|---|---|
IFRS 9, Financial Instruments |
| YES |
IFRS 10, Consolidated Financial Statements | YES but limited changes proposed |
|
IFRS 11, Joint Arrangements | YES but limited changes proposed |
|
IFRS 13, Fair Value Measurement | YES but limited changes proposed |
|
IFRS 15, Revenue from Contracts with Customer | YES but limited changes proposed |
|
IFRS 16, Leases |
| YES |
Phase 1 changes are expected to be effective for accounting periods starting on or after 1 January 2019.
However, phase 2 may be more challenging but its effective date is 2022.
Briefly the phase 2 proposed changes (note they are not described by FRC as ‘limited’) which may be significant are: