Trethi Teg wrote:
I couldnt agree more. Nice for the academics and accounting nerds who are more interested in pontificating instead of concentrating on looking after thier clients interests.
I have a suggestion on how to deal with this latest FRS- ignore it!.
While I am not a fan of FRS 102 either or all the change we have seen, how can you be looking after your clients interests if you ignore it? If my solicitor said to me that they were going to ignore something that had to be done I’d be thinking twice about using their services. I asked on a recent update course of all this would go away once we leave the EU and the lecturer said it’s highly unlikely.
Not sure I agree entirely with you. I am not a fan of FRS 102 or the extra work that has been involved with my clients.
However what I will say is that we do need a system that regulates it all. FRS 102 isn’t ideal but I’m sure it would be carnage without it.
The answer is move with the times or move out.
So it is not loans to directors as well? When I asked this question on a webinar the presenter told me it was all directors loans as we have a few clients with these sorts of loans.
So on the FRS 105 disclosures, should we be disclosing the two additional pieces of information (average number of employees and off-balance sheet arrangements) now? Or should we wait for the standard to be updated?
FRS 105 requires only two notes, but says an entity is "permitted, but not required, to disclose information additional to that required by this section".
Questioned this with our institute today and they said as it is required by law the disclosures should be made rather than wait until the standard is updated. Lady there said legislation takes precedent over FRS105.
Not sure I agree with John's 99% here! Over the years I've seen a lot of small companies where a director has made a loan that has been formalised. Indeed we have at least 8 small company clients where they have chosen to formalise loan terms for their own purposes. We've also had a few other instances where loans have had terms in place and the company has early adopted FRS 102 because they are are now small under the new benchmarks. To me this change is quite helpful as we don't have to faff around discounting anymore. Thank heavens!
Clients not understand this standard or what it means is More or less what I said to the Institue when I raised a number of queries to them about this standard. Their (curt) response was "as an accountant it is your job to make the client understand the implications of what their accounts mean." Not really helpful but neither are these constant changes.
I agree things have to change and can't stay the same for decades , but I've barely begun using the standard and already they are changing it.
I printed the original article and it had the formulas in that's how I got it To work - the updated article doesn't though.
Hmmm. I have tried to replicate your EIR example but I think you are missing formulas in your Interest column which link these cells to your C1 EIR target cell. Can you advise?
I think it's c1 x B4 then c1 x b5 etc. I redid it and it comes back to the example. I'm using these spreadsheets for our clients and they seem to be a lot easier than discounting these [email protected] things.
I had a lengthy discussion about this with the institute's helpline who also advised using exactly this approach for our clients that have HP and finance leases. The problem is for me that you end up in exactly the same place you would have ended up if you used the straight line method of interest allocation. I can see the logic but I don't agree that we should have to go to these extremes for our clients who are only small at the end of the day. Hopefully they'll bring back FRSSE once we are out of the EU!
I had a discussion with my institute about all of this change we are going through. Apparently MTD will have no bearing on changes to FRS 102 because The accounting standards board don't get involved with tax and vica versa. I also tried to explain to our institute that clients don't understand the accounts anyway so all of this change is probably unnecessary . That was met with a very harsh response by the person on the other end of the phone who basically said that it is our job to make sure clients understand their accounts and any non compliance with accounting standards would result in a negligence claim that wouldn't be covered by PI insurance! Quite scary really. Roll on retirement.