FRSSE: The end of the line

Audit and Technical Partner
Leavitt Walmsley Associates Ltd
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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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26th Mar 2014 13:31

To FRSSE, or not to FRSSE

"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? 

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17th Mar 2015 16:17


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27th Mar 2014 12:56

Is change necessary?

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.


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30th Mar 2014 19:14

its all a complete waste of time
All this navel gazing

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By redboam
16th Apr 2014 11:02

Sledgehammer and Nut

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.

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