New UK GAAP application as at 31 December 2015
For periods beginning on or after 1 January 2015, three new Financial Reporting Standards (FRSs 100, 101 and 102) will be 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 31 December 2015.
Note that, to date, Regulations (The Companies, Partnerships and Groups (Accounts and Reports) Regulations 2015) have been made to implement the EU Accounting Directive for companies. Separate legislation making similar changes in relation to LLPs is expected during 2016.
| Pronouncement | Effective date | Application for quarters ending 31 December 2015? | |||
|---|---|---|---|---|---|
| 1st qtrs.* | 2nd qtrs.** | 3rd qtrs.*** | Full yrs**** | ||
|
FRS 100
|
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| Periods beginning on or after 1 January 2015. Early adoption is permitted without restriction | Yes | Yes | Yes | Yes | |
| % | % | % | % | % | |
| FRS 101 | |||||
| Periods beginning on or after 1 January 2015. Early adoption is permitted without restriction |
Yes | ||||
| # | # | # | # | # | |
|
FRS 102
|
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| Periods beginning on or after 1 January 2015. Early adoption is permitted for periods ending on or after 31 December 2012 | Yes | ||||
|
Amendments to FRS 102 (July 2014 and February 2015)
|
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| & | & | & | & | & | |
| These amendments apply for accounting periods beginning on or after 1 January 2017. Early application is permitted with immediate effect. If an entity applies these amendments to an accounting period beginning before 1 January 2017 is shall disclose that fact. | Optional | Optional | Optional | Optional | |
|
FRS 103
|
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| 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. | Yes | Yes | Yes | Yes | |
|
FRSSE
|
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| Periods beginning on or after 1 January 2015. | Optional^ | Optional^ | Optional^ | Optional^ | |
|
FRS 104
|
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| Effective for periods beginning on or after 1 January 2015. Early adoption is permitted if an entity also applies FRS 101 or FRS 102 for an accounting period beginning before 1 January 2015. | Yes | Yes | Yes | Yes | |
|
FRS 105
|
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| FRS 105 is effective for periods beginning on or after 1 January 2016. Early adoption is permitted (see note below ^) | Optional^ | Optional^ |
Optional^ | Optional^ | |
* 1st quarter ending on 31 December 2015 (accounting period began on 1 October 2015).
** 2nd quarter ending 31 December 2015 (accounting period began 1 July 2015).
*** 3rd quarter ending 31 December 2015 (accounting period began 1 April 2015).
**** 4th quarter ending 31 December 2015 (accounting period began 1 January 2015).
^ The FRSSE is applicable to companies and groups that qualify as small under the Act and analogous entities. Its application is optional. Those 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) for accounting periods beginning on or after 1 January 2016. 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. There are no restrictions on early adoption of FRS 105. 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 want to early adopt the new Regulations and FRS 102 including Section 1A to 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 subject to adopting the requirements in the Accounting Regulations and hence avoid applying the FRSSE 2015 for one year. Note that Section 1A of FRS 102 cannot be early adopted for accounting periods beginning before 1 January 2015.
# 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 required if and only if the entity is early adopting the new Accounting Regulations. Companies can therefore take the exemption from the requirement of IFRS 1 to present an opening statement of financial position for qualifying entities adopting FRS 101 for the first time from 1 January 2015 (and earlier periods) but 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.
& 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 restrictions on early adoption.
% The amended version of FRS 100 is applicable for accounting periods beginning on or after 1 January 2016. Early application of the amended standard is permitted, providing an entity also applies the edition of FRS 101, FRS 102 and FRS 105 effective for accounting periods beginning on or after 1 January 2016 and is subject to the early application provisions set out in those standards. An entity choosing not to apply these amendments to accounting periods beginning before 1 January 2016 shall not adopt the associated amendments made to FRS 101, FRS 102 nor FRS 105 to accounting periods beginning before 1 January 2016.