British accounting practices and the way in which we prepare our financial statements is changing.
The FRSs (Financial Reporting Standards) and SSAPs (Statements of Standard Accounting Practice) will now be replaced by the more up-to-date FRS102.
“FRS 102 modernises and simplifies financial reporting for unlisted companies and subsidiaries of listed companies as well as public benefit entities such as charities,” said Roger Marshall, Financial Reporting Council Board member and chairman of its Accounting Council.
“The standard updates UK accounting to take account of evolving business practices.
“It is succinct, easy to digest and use. Developed with considerable consultation, FRS 102 brings a distinctly British flavour to the international standard for small and medium sized businesses.”
The changes, which became compulsory for many companies with accounting periods beginning on or after 1 January 2016, will be seen in accounts with year ends of December 2016.
Who will be affected by these changes?
Virtually all UK companies will be affected by the introduction of FRS102 (or the new standard relating to micro entities FRS105).
Only companies preparing accounts under the International Financial Reporting Standards (IFRS) will not be affected.
The changes
As well as changes to the terminology used in accounts (for example, the profit & loss account becomes the ‘income statement’), there are changes which may affect a company’s reported profits, tax charges and distributable reserves.
The FRS102 document is around 350 pages long. Full details can be found here
If you require any further information, advice or support about the changes to the FRS102, please contact one of the team at Ellis & Co on 01244 343504.
Will you be affected by the introduction of Financial Reporting Standard (FRS) 102?
