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CCH launches FRS 102 blitz

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30th Mar 2015
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Wolters Kluwer, working through its CCH brand, has beefed up its output to help accountants and finance managers get to grips with FRS 102, the new accounting standard applicable to small and medium-size enterprises.

The changes, which became mandatory in January, were a dramatic shake-up, replacing more than 3,000 pages of UK and Ireland GAAP with a much leaner 300.

CCH will be hosting 14 FRS 102 workshops throughout 2015, 13 in England and one in Glasgow.

Workshop leader Shân Kennedy will focus on practical learning, using demonstrated examples and illustrations from real-life scenarios to show  how the new rules apply in practice.

The impact of the new UK GAAP will vary significantly from company to company, according to Kennedy. “Some companies' accounts will be changing quite a lot, but every company will need to have a look to see what it means for them and they’ll need to read the FRS 102,” she said.

There are very real risks that leaving preparations too late could cause problems with illegal dividends and bank borrowing covenants, she added.

“The first year end to be impacted will be companies with December year-ends. If their year-end is December 2015, they think that ‘oh, I don’t need to worry about this at the moment because I won’t be preparing these accounts until February 2016',” she said.

“But throughout 2015, if they wanted to pay a dividend, there are Companies House requirements that say a company requires sufficient distributable reserves in order to pay that dividend and the way distributable reserves will be measured are under FRS 102.”

In the eventuality of profit or loss volatility coming from a foreign exchange purchase, for instance, companies might inadvertently pay dividends that are illegal if they don’t start thinking about it now.

Despite imposing unwelcome changes on the profession, Kennedy could understand the FRC reason's for bringing forward the new standard.

“A lot of it hadn’t been updated since the 1990s,” she said. “UK GAAP was too entrenched in history. What we need is [a standard] to reflect what is going on now. It is much more modernised.”

Visit CCH's information page on the  new UK GAAP to see more training materials and guidance on FRS 102.

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