The areas of FRS 102 affected are: 

Section 1 ‘Scope’.  In line with paragraph 1.14 of FRS 102 an entity within the scope of a Statement of Recommended Practice (SORP) may only apply FRS 102 early if early application does not conflict with the requirements of the SORP or a legal requirement.  The FRC have clarified that although not all SORPS have been updated to reflect the requirements of FRS 102, applying the requirements of current SORPS “may not necessarily conflict with FRS 102”.  The FRC clarify that where a SORP is silent on a topic, applying FRS 102 accounting policies “should not conflict with the current SORP”.  Similarly, where SORPS and FRS 102 use different terminology to express the same recognition and measurement concepts as in FRS 102, compliance with FRS 102 “should not automatically lead to non-compliance with the SORP”.     

Section 12 ‘Other Financial Instruments Issues’.  The FRC have clarified that in relation to net investment hedges in foreign operations, FRS 102 paragraph 12.17 and paragraph 62 of the Accounting Council’s Advice to the FRC are consistent in allowing net investment hedges of foreign operations that are branches in the separate financial statements of a parent.  They clarify that the Accounting Council’s Advice in paragraph 62 was referring to foreign operations that are separate legal entities (e.g. subsidiaries) only and did not intend to imply that entities could not use net investment hedge accounting for foreign branches in the separate financial statements of the parent.  

Section 29 ‘Income Tax’.  The FRC has sought to clarify the meaning of the phrase “the amount that can be deducted for tax” in relation to the recognition of deferred tax assets or deferred tax liabilities arising on assets (other than goodwill) acquired in a business combination. 

The full document of all editorial amendments and clarification statements to FRS 102 can be found on the FRC website.