Steve Collings looks at some of the pressing issues first time adopters and second-time preparers might want to consider before the next accounts preparation or audit exercise.
As 2016 draws to a close, many companies will either be preparing to complete their second set of accounts under FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland, or be preparing to adopt the standard for the first time because they are dealing with small companies with 31 December 2016 year-ends.
A lot of companies have already gone through the transition process and have prepared accounts under FRS 102.
There are now some real life experiences and more emerging issues coming to the surface as to how the implementation of the standard went as well as the quality of the accounts that have been produced.
We've examined the feedback and reviews of preparers that have already gone through the transition.
Accounting policies, along with disclosures in the financial statements, have always seemed to be a contentious subject. Many practitioners rely on automated accounts production software systems to get things like accounting policies and disclosure notes correct, but these will usually only produce the bare minimum and are often not tailored to the client’s specific circumstances.
This problem, unfortunately, does not go away under FRS 102. In fact, the issue seems to be more of a problem for companies at the smaller end of the scale with some practitioners dealing with early adopters that have now become small under new Companies Act size thresholds complaining that the accounting policies produced by their software are ‘overkill’.
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