UK GAAP update: What lies ahead

With so much change taking place in financial reporting as the UK negotiates the transition to a new regime for small/medium and micro companies, Steve Collings presents an update on what is likely to happen over the next few months.

Financial reporting is currently experiencing significant amounts of change as the Financial Reporting Council (FRC) continues to grapple with the issues surrounding the new UK accounting standards (FRS 102, the FRSSE and micro-entities legislation). This article examines the current status of financial reporting and explains the likely developments that could take place in the coming months.

FRS 102

FRS 102  ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ is going to replace all extant FRSs/SSAPs and UITF Abstracts with effect for accounting periods commencing on or after 1 January 2015 (earlier adoption is permissible). The FRC said it wants FRS 102 to be a “stable platform” and that the standard itself will be reviewed every three years.

However, even before the starting date has arrived amendments have been proposed to FRS 102 to improve the standard in time for first-time adopters...

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  • Charities SORP
  • LLP SORP
  • The FRSSE
  • Micro-entities

Life at the FRC is clearly very busy! Financial reporting is currently undergoing the most significant amounts of change in a generation and professional bodies are keen to emphasise the importance of firms ensuring they are adequately prepared for the changes.

FRS 102 is to be applied retrospectively to the start of the earliest period reported in the financial statements (ie 1 January 2014 for a December 2015 year-end). There are no transitional provisions in the FRSSE (effective January 2015) and so there is no requirement to restate comparatives when FRSSE (effective January 2015) comes into effect.

Steve Collings is the audit and technical partner at Leavitt Walmsley Associates and the author of ‘Interpretation and Application of International Standards on Auditing’.

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Comments
Paul Scholes's picture

Thanks Steve

Paul Scholes | | Permalink

Even more happy now that 90% of mine are Micros and that, by the time the FRSSE is updated, this will be 100%.  

My clients and I have been through so many changes in standards and disclosures over the decades, and yet, the core businesses have remained pretty much the same and so, for me (and them) having to deal with yet more regulatory tinkering, would be a distraction, and a waste of my time. 

Sorry to any newbies just starting out on their accounting careers, who think this is exciting.

mr. mischief's picture

it's pure drivel    1 thanks

mr. mischief | | Permalink

Anyone who thinks otherwise the whole system failed utterly when 300 European banks failed and their accounts all looked great immediately prior to failure.

Less is more!  Less stupid mind-boggling detail please.  Instead put your name and personal assets  on the line as an auditor, and potentially your right to remain outside the prison gates if you sign off enough dodgy stuff.

No one likes change..... especially me

AndrewV12 | | Permalink

The FRSSE was fine, I loved it, why change for the sake of it, but similar to above 100% of my clients will be micro entities.  

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ireallyshouldkn... | | Permalink

The micro entity accounts are marginally easier to prepare, but tell you almost nothing about the company. Great for public disclosure (you cant tell a thing!) but I am adding in a full balance sheet and P&L as standard for the clients or its just garbage.