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New UK GAAP application for reporting periods ending 30 September 2016

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23 Sep 2016

For periods beginning on or after 1 January 2015, three new Financial Reporting Standards (FRSs 100, 101 and 102) are in force, bringing with them a number of new options for all UK entities and groups. These new Standards replace old UK GAAP.

2015 is also the last year that companies can apply the Financial Reporting Standard for Smaller Entities (FRSSE) due to changes to UK GAAP as a result of  the implementation of the EU Accounting Directive.  The table below shows the options available for financial reporting periods ending on 30 September 2016.

Pronouncement Effective date Application for quarters ending 30 September 2016?
1st qtrs.* 2nd qtrs.** 3rd qtrs.*** Full yrs****
FRS 100
Periods beginning on or after 1 January 2015.  Already adopted in prior year (July 2015) Already adopted in prior year (April 2015) Already adopted in prior year (Jan 2015) Mandatory
Periods beginning on or after 1 January 2016 (see note 4) Mandatory (see note 4) Mandatory (see note 4) Mandatory(see note 4) Optional (see note 4)
FRS 101
Periods beginning on or after 1 January 2015. 
Already adopted in prior year (July 2015) Already adopted in prior year (April 2015) Already adopted in prior year (Jan 2015) Mandatory
Already adopted in prior year (July 2015)
Already adopted in prior year (April 2015)
Already adopted in prior year (Jan 2015)
Mandatory
See note 2 Mandatory (see note 2) Mandatory (see note 2) Mandatory (see note 2) Optional (see note 2)
The amendments are available from when an entity applying FRS 101 first applies IFRS 15.  However the change in company law to permit the equity method in individual financial statements is effective from 1 January 2016 (or from 1 January 2015 if it is adopted early). NA (see note 5)/Choice permitted by change in company law optional NA (see note 5)/Choice permitted by change in company law optional NA (see note 5)/Choice permitted by change in company law optional NA (see note 5)/Choice permitted by change in company law optional
The amendments are effective for accounting periods beginning on or after 1 January 2016. Mandatory Mandatory Mandatory NA
FRS 102
Periods beginning on or after 1 January 2015.  
Already adopted in prior year (July 2015) Already adopted in prior year (April 2015) Already adopted in prior year Jan 2015) Mandatory
Amendments to FRS 102 (July 2014 and February 2015)
Already adopted in prior year (July 2015)
Already adopted in prior year (April 2015)
Already adopted in prior year (Jan 2015)
Mandatory
Applicable for periods beginning on or after 1 January 2016, with early adoption permitted and required if and only if the entity is early adopting the new Accounting Regulations (or from 1 January 2015 if the entity is not subject to company law) - see note 3 Mandatory (see note 3) (section 1A optional - see note 1 Mandatory (see note 3) (section 1A optional - see note 1 Mandatory (see note 3) (section 1A optional - see note 1) Optional - (see note 3)
These amendments apply for accounting periods beginning on or after 1 January 2017. Early application is permitted with immediate effect provided this is disclosed. Optional Optional Optional Optional
The amendments are effective for accounting periods beginning on or after 1 January 2016. Mandatory Mandatory Mandatory NA
FRS 103
Effective for accounting periods beginning on or after 1 January 2015. Early application is permitted, provided the entity also applies FRS 102 from the same date and discloses this fact that it has applied FRS 103 early.  Once FRS 103 is adopted, FRS 27 and the ABI SORP will cease to apply. Already adopted in prior year (July 2015) Already adopted in prior year (April 2015) Already adopted in prior year (Jan 2015) Mandatory
 The amendments are applicable for accounting periods ending on or after 1 January 2016.  Early adoption is not permitted. Mandatory Mandatory Mandatory NA
FRSSE
Periods beginning on or after 1 January 2015. Not an option (see note 1) Not an option (see note 1) Not an option (see note 1) Optional (see note 1)
FRS 104
Effective for periods beginning on or after 1 January 2015.  Already adopted in prior year (July 2015) Already adopted in prior year (April 2015) Already adopted in prior year (Jan 2015) Mandatory
FRS 105
FRS 105 is effective for periods beginning on or after 1 January 2016. Early adoption is permitted  Optional (see note 1) Optional (see note 1) Optional (see note 1) Optional (see note 1)
Effective for periods beginning on or after 1 January 2016.  Early application is permitted for accounting periods beginning on or after 1 January 2015 Optional (see note 1) Optional (see note 1) Optional (see note 1) Optional (see note 1)

* 1st quarter ending on 30 September 2016 (accounting period began on 1 July 2016).

** 2nd quarter ending 30 September 2016 (accounting period began 1 April 2016).

*** 3rd quarter ending 30 September 2016 (accounting period began 1 January 2016).

**** 4th quarter ending 30 September 2016 (accounting period began 1 October 2015).

Note 1 - The FRSSE is applicable to companies and groups that qualify as small under the Act and analogous entities. Its application is optional.  For accounting periods beginning on or after 1 January 2016 those previously applying the FRSSE 2015 will either have to follow the recognition and measurement requirements of FRS 102 and the presentation and disclosure requirements within 'Section 1A Small Entities' or apply FRS 105 The Financial Reporting Standard applicable to the Micro-entities Regime  (if they qualify as micro-entities).  However, companies may early adopt the requirements in Section 1A of FRS 102 for accounting periods beginning on or after 1 January 2015 but, in doing so, must also early adopt all of the requirements in the new Accounting Regulations.  

Those companies that qualified as medium sized under the size limits prior to the changes made in the new Accounting Regulations but now qualify as small under the new Regulations may therefore want to early adopt the new Regulations and FRS 102 including Section 1A.  This will avoid the need to apply full FRS 102 for 2015 and then Section 1A for accounting periods beginning on or after 1 January 2016 onwards.  Similarly, a micro company applying the FRSSE could early adopt FRS 105 from 1 January 2015 or before.

Note 2 - The July 2015 amendments to FRS 101 are effective for periods beginning on or after 1 January 2015, other than those arising from revisions to the Accounting Regulations which are effective periods beginning on or after 1 January 2016, with early adoption permitted and required if and only if the entity is early adopting the new Accounting Regulations.  

Qualifying entities can therefore take the exemption from the requirement of IFRS 1 to present an opening statement of financial position from 1 January 2015 (and earlier periods).  However they cannot take advantage of the alternative IAS 1 formats for the income statement and statement of financial position unless early adopting the requirements in the Accounting Regulations.  Note that the July amendments to FRS 101 relating to changes to the Accounting Regulations cannot be early adopted for accounting periods beginning before 1 January 2015.

Note 3 - The July 2015 amendments to FRS 102 are applicable for periods beginning on or after 1 January 2016, with early adoption permitted and required if and only if the entity is early adopting the new Accounting Regulations (or from 1 January 2015 if the entity is not subject to company law).  So, as above, small companies, if early adopting the Accounting Regulations, will be able to adopt Section 1A of FRS 102 from 1 January 2015 avoiding the need to apply the FRSSE 2015 for one year and then change to Section 1A mandatorily from 1 January 2016.  Note that the July 2015 amendments to FRS 102 cannot be early adopted for accounting periods beginning before 1 January 2015.  However, the amendments in relation to share based payment transactions with cash alternatives are effective for accounting periods beginning on or after 1 January 2015 with no further restrictions on early adoption.

Note 4 - FRS 100 does not contain accounting requirements in itself but rather provides direction as to the relevant standard(s) for an entity to apply (whether EU-adopted IFRSsFRS 101FRS 102, or FRS 105). FRS 100 was updated in July 2015 as a result of consequential amendments arising from the implementation of the EU Accounting Directive, introduction of FRS 105 and withdrawal of the FRSSE.  

Entities should apply the version of FRS 100 that corresponds to the edition of FRS 101, FRS 102 or FRS 105 to which they are applying.  For instance if an entity applies the edition of FRS 101 applicable for accounting periods beginning on or after 1 January 2016, it must also apply the revised version of FRS 100 published in July 2015.

Note 5 - IFRS 15 is applicable to an entity's first annual IFRS financial statements for a period beginning on or after 1 January 2018.  It has not yet been endorsed for use in the EU.

Correction list for hyphenation

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