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| Financial Reporting Standard 102 | |
|---|---|
| Standard | Financial Reporting Standard 102 |
| Issued by | Accounting Standards Board |
| Jurisdiction | United Kingdom and Republic of Ireland |
| First issued | 2013 |
| Replaces | Generally Accepted Accounting Practice (UK and Ireland) |
| Related documents | International Financial Reporting Standards, Companies Act 2006, Companies Acts 1963–2014 |
Financial Reporting Standard 102 is a United Kingdom and Republic of Ireland accounting standard that sets out financial reporting requirements for many entities outside the scope of International Financial Reporting Standards and for those preparing financial statements under the Companies Act 2006 and related Companies Acts 1963–2014 legislation. It was developed by the Financial Reporting Council (United Kingdom) in response to convergence initiatives involving the European Union and international standard setters, replacing prior UK and Irish GAAP frameworks. The standard influences reporting by entities ranging from small private companys to large charity and pension fund reporters that elect the standard.
FRS 102 was issued as part of a suite of standards promulgated by the Financial Reporting Council (United Kingdom) and reflects simplified versions of principles found in International Accounting Standard 1 and other pronouncements of the International Accounting Standards Board. The drafting process engaged bodies such as the Institute of Chartered Accountants in England and Wales, the Institute of Chartered Accountants of Scotland, the Chartered Institute of Management Accountants, and the Chartered Accountants Ireland. Adoption timelines were coordinated with statutory changes under the Companies Act 2006 and regulatory practices of the Financial Conduct Authority and other supervisory authorities.
FRS 102 applies to entities that are required to prepare financial statements under the Companies Act 2006 and those eligible under transitional provisions, including many limited companys, charity reporting entities, trusts and pension funds. Exemptions exist for entities that are required or elect to apply International Financial Reporting Standards or those qualifying under alternative domestic standards such as FRS 101 or FRS 105. The scope distinguishes between public interest entities overseen by bodies like the Financial Reporting Council (United Kingdom) and non-public-interest entities regulated by the Charity Commission for England and Wales or the Charities Regulator (Ireland).
The standard adopts conceptual approaches consistent with the International Accounting Standards Board’s framework, emphasizing asset and liability recognition when future economic benefits are probable and costs can be measured reliably. It sets recognition criteria for financial instruments, intangible assets, investment property, and employee benefit obligations, aligning with principles evident in International Accounting Standard 19 and International Financial Reporting Standard 9 while retaining sector-appropriate simplifications applied by bodies such as the Financial Reporting Council (United Kingdom). Guidance addresses business combinations and goodwill recognition with reference to precedents from the Companies Act 2006 and case law affecting reporting practice.
Measurement bases under the standard include historical cost, fair value where required or permitted, and amortised cost for many financial instruments, drawing methodological parallels to International Financial Reporting Standard 13 and International Accounting Standard 36 impairment approaches. Presentation requirements cover statement formats influenced by Company law provisions and regulatory filings to the Registrar of Companies and other agencies. The standard prescribes treatment of depreciation, impairment testing, and presentation of comprehensive income items similar to guidance from the International Accounting Standards Board and tailored for practitioners from organisations such as the Association of Chartered Certified Accountants.
FRS 102 mandates disclosures intended to ensure transparency for stakeholders including directors, auditors from firms like the Big Four, lenders governed by the Prudential Regulation Authority, and regulators such as the Financial Conduct Authority. Required disclosures cover judgements and estimates, risk management information for financial instruments, related party transactions involving parties like multinational groups and trustees, and segmental reporting where applicable aligned with Companies Act 2006 schedules. Charity and public benefit entity disclosures must intersect with guidance from the Charity Commission for England and Wales and Charities Regulator (Ireland).
The standard includes transitional provisions and disclosure requirements for first-time adopters, influenced by transitional guidance from the International Accounting Standards Board and implementation projects of the Financial Reporting Council (United Kingdom). Entities converting from former UK GAAP or from International Financial Reporting Standards must apply opening balance sheet adjustments and reconcile equity and profit figures to promote comparability for stakeholders including auditors, audit committees, and users such as banks and investors. Regulators like the Financial Conduct Authority and courts interpreting the Companies Act 2006 may influence practical adoption and enforcement.
FRS 102 is frequently compared with International Financial Reporting Standards, domestic frameworks like FRS 101 and FRS 105, and regional practices influenced by the European Financial Reporting Advisory Group. Compared with International Financial Reporting Standards, the standard simplifies certain recognition and measurement requirements and reduces disclosure burdens for smaller entities, a balance similar to approaches taken in jurisdictions such as Canada and Australia when adapting International Financial Reporting Standard principles. Comparisons often reference pronouncements from the International Accounting Standards Board, regulatory positions of the Financial Reporting Council (United Kingdom), and professional guidance from institutes like the Institute of Chartered Accountants in England and Wales and Chartered Accountants Ireland.
Category:Accounting standards