Share this content
8

Correct disclosures for FRS 102/101?

Small companies

Didn't find your answer?

2 scenarios that are essentially same.

1/ If a small company elects to apply FRS 102 (but not section 1A) would you then expect to see full P&L notes (turnover, operating profit, taxation, etc) in order to comply with the framework? I've seen a lot of small companies filing differently i.e. some with notes, some not. The latter doesn't make sense to me if I'm being truthful. Why apply a framework and then override it's requirements by claiming small company examptions? Which is right?

2/ Same question, except swap out 102 with 101.

Replies (8)

Please login or register to join the discussion.

avatar
By johnt27
28th Sep 2020 17:06

Are you talking about applying the reduced disclosure framework under FRS 102?

Either way FRS 102 and 101 are very clear about what needs to be disclosed and what applies to small and medium/large companies. The only variability then comes from CA2006.

Thanks (0)
Replying to johnt27:
avatar
By Shane123
28th Sep 2020 19:02

Hi John, yes most of the small companies that apply FRS 102 (again not Section 1A) that I come across are taking reduced disclosures - trying to keep all entities in the group looking more or less the same. The same applies though... for me the entities should be complying with the framework. If they don't want to disclose the P&L notes then apply section 1A.

Thanks (0)
Replying to Shane123:
avatar
By johnt27
29th Sep 2020 08:41

I think taking the reduced disclosure framework over 1A is the exception to the rule, based on what I generally see. Why disclose more than necessary?

As for FRS 101, the major difference is you'll be applying IFRS rather than UK GAAP. The major changes between the two being IFRS 9, 15 and 16 with some additional nuanced differences applicable on rare occasions, assuming companies are small.

Thanks (0)
Replying to johnt27:
avatar
By Shane123
29th Sep 2020 08:50

Then why apply (full) FRS 102 at all? Reduced disclosures gives you certain exemptions (cashflow, financial instruments, etc) that are available through applying section 1A anyway. What's not available through applying reduced disclosures is any exemption re P&L notes. It's almost making the framework redundant IMO.

Thanks (0)
Replying to Shane123:
avatar
By johnt27
29th Sep 2020 09:13

The reduced disclosure framework extends to any subsidiary, regardless of size, subject to qualifying criteria.

Logically, if you qualify as small you would take FRS 102 1A. If you were medium or large, and a qualifying subsidiary, you then opt for either 101 or 102, with reduced disclosures.

Thanks (0)
Replying to johnt27:
avatar
By Shane123
29th Sep 2020 09:55

That's not really what I'm getting at. I'm asking about small companies that don't apply section 1A but seemingly taking the exemptions anyway. My opinion is that who elect to apply a framework, you should stick to it. So if they are a small company and apply FRS 102 (with reduced disclosures) they should be disclosing the P&L notes.

Thanks (0)
Replying to Shane123:
avatar
By johnt27
29th Sep 2020 10:49

The penny has dropped - sorry misunderstood the point you were making!

I agree with you, if you're a small company not taking 1A then you can't then exclude P&L notes etc as these exemptions don't apply...

Thanks (0)
Replying to johnt27:
avatar
By Shane123
29th Sep 2020 15:07

Thanks John. It was likely my method of explaining to be fair!

Thanks (0)
Share this content

Related posts