FRC amends UK Standards to reflect changes in the law as a result of the UK’s withdrawal from the EU

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22 Dec, 2020

The Financial Reporting Council (FRC) has published amendments to UK accounting standards to reflect changes in UK company law following the UK’s exit from the European Union that come into effect at the end of the Transition Period.

In January 2020 the UK exited the European Union. As a result, changes were required to UK company law to ensure that it continues to operate effectively. Some of these changes also lead to consequential amendments to accounting standards so that the standards remain in line with the law.

Amendments to UK and Republic of Ireland accounting standards – UK exit from the European Union amends five accounting standards, the FRC’s pronouncement on interim reporting and the implementation guidance accompanying FRS 103 Insurance Contracts.

As these amendments reflect changes in UK company law, they are not expected to introduce changes in financial reporting other than when required by law. There should be no practical impact on entities in the Republic of Ireland.

The effective date for these amendments is accounting periods beginning on or after 1 January 2021. Early application is permitted in some circumstances to provide UK entities with the option to use International Accountinf Standards (IASs) that are adopted for use within the UK after 31 December 2020, in addition to International Financial Reporting Standards (IFRSs) that have been adopted in the EU as at this date. This is consistent with the transitional arrangements provided in UK company law for entities preparing ‘IAS accounts’.

A press release and the amendments are available on the FRC website.

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