FRC consults on new interim reporting requirements

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12 Nov, 2014

The Financial Reporting Council (FRC) has today published FRED 56 'Draft FRS 104 Interim Financial Reporting'. These proposals set out a new standard on interim reporting for entities that apply FRS 102 in their annual financial statements. The proposed standard is based on IAS 34, the international standard on interim reporting and will replace the existing ASB Statement 'Half-yearly financial reports'. Comments are invited by 12 January 2015.

When the FRC was developing FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', it was decided that FRS 102 would not contain guidance on interim reporting and that instead the FRC would undertake a separate project to review the existing ASB Statement 'Half-yearly financial reports'.

The FRC has now published the results of this project. Rather than update the existing Statement, the FRC is proposing to withdraw it and replace it with a new standard based on IAS 34 'Interim Financial Reporting', adapted for use by entities that apply FRS 102.  The new standard will not impose an obligation on entities to produce interim financial reports. However, entities that make a statement of compliance with it will be required to apply all of its provisions. The new standard will, for example, apply to those listed investment trusts which report under UK GAAP.

The FRC is proposing that entities which apply FRS 101 'Reduced Disclosure Framework' and are subject to a requirement to prepare interim financial statements should also apply FRS 104, but with references to FRS 102 read as the equivalent requirements in EU-adopted IFRS as amended by paragraph AG1 of FRS 101.

As well as withdrawing the ASB statement on half-yearly reporting, the FRC is also proposing to withdraw the existing ASB Statement 'Preliminary announcements'. This statement was issued in 1998 and in the FRC's view it is now obsolete, given developments in the requirements and practice around preliminary announcements since then.

The new standard is proposed to be effective from 1 January 2015, with the ASB statements withdrawn from that date. The FRC has requested comments by 12 January 2015 with the expectation that a final standard will be published by the end of the first quarter of 2015.

The press release and full consultation document can be obtained from the FRC website.

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