FRSSE: The end of the line

UK GAAP is currently undergoing the most significant overhaul in a generation with the introduction of FRS 102 becoming mandatory for accounting periods commencing on or after 1 January 2015, explains Steve Collings.

In addition, there are some consequential amendments to the FRSSE (effective April 2008) which form the FRSSE (effective January 2015) and also the EU Accounting Directive which was introduced at the end of 2013 and significantly revises the small companies regime in terms of a vast amount of reduced disclosures.

So with all this change, what does the future hold for the beloved FRSSE? 

It was always the intention of the Financial Reporting Council (FRC) to revisit the FRSSE once FRS 102 had taken effect to ensure that there are no significant variations between the FRSSE and the new UK GAAP. At present, FRSSE (effective January 2015) has only experienced limited amendments including the reduction of the presumed economic life of goodwill and intangible assets from 20 years to five years where management are unable to reliably assess the useful economic life of such assets; inclusion of revised terminology and removal of references to FRSs/SSAPs/UITFs and FRSSE (effective January 2015) now includes a specific requirement for entities to annually assess whether there are any indicators of asset impairment.

When the new EU Accounting Directive...

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Comments

To FRSSE, or not to FRSSE

suepalterman | | Permalink

"The option to bring small companies under the scope of FRS 102 and have separate sections which would stipulate the differing legal requirements for small and micro-entities ......"

So the choice is FRSSE re-written to take account of FRS 102; or FRS 102 FRSSEed for small companies and the results scattered in sections amongst the 'big boys'.

Major changes are coming either way, but will what is required of small companies be significantly different depending on which route is taken? .. or just the ease of finding out what is required? 

Changes make simple complicated

secondhand_22 | | Permalink

When you keep changing rules aimed at making things simple then the system ceases to be simple as you are constantly adjusting to changes, checking cut off dates and transitional rules.

I'm not sure how much all these changes achieve - other than being a pain for practitioners.

Perhaps if we could find other things for the ivory tower academic types who think up all these changes to do then they would tinker less. 

Is change necessary?

Edward Beale | | Permalink

The test for the FRC is whether the law changes are so great that it is better to rip up the FRSSE and introduce FRS 102 light, or whether it would be more proportionate to retain and amend the FRSSE.

If the accounts are going to look substantially the same as they do at present, then this is unlikely to justify the cost of introducing a totally new rule book.

Consistency with FRS 102 is a "nice to have" not a "need to have".  It is not as if the FRSSE is not currently fit for purpose.

 

carnmores's picture

its all a complete waste of time

carnmores | | Permalink

All this navel gazing

Sledgehammer and Nut

redboam | | Permalink

Agreed - What seems to have been forgotten are the cost burdens to small businesses of complying with changes in the rules that often appear to be motivated by nothing more than the regulators trying to justify their existence.