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FRS 101

Overview

FRS 101 “Reduced Disclosure Framework” (link to FRC website) sets out the disclosure exemptions (a reduced disclosure framework) for the individual financial statements of subsidiaries, including intermediate parents, and ultimate parents that otherwise apply the recognition, measurement and disclosure requirements of EU-adopted IFRS Standards.

History of FRS 101

Date Development Comments
23 November 2012 FRS 101 issued Effect for periods beginning on or after 1 January 2015.
17 December 2013  FRED 53: ‘Draft amendments to FRS 101 'Reduced Disclosure Framework' (2013/14) issued Comment period ended 21 March 2014
23 July 2014  Amendments to FRS 101 Reduced Disclosure Framework (2013/14 cycle) published Effect for periods beginning on or after 1 January 2015
22 August 2014  Revised version of FRS 101 issued Effect for periods beginning on or after 1 January 2015
15 December 2014  FRED 57: ‘Draft amendments to FRS 101 'Reduced Disclosure Framework' (2014/15 cycle) issued Comment period closed on 20 March 2015
19 February 2015
FRED 60 - Draft amendments to FRS 100 Application of Financial Reporting Requirements and FRS 101 Reduced Disclosure Framework issued
Comment period closed on 30 April 2015
16 July 2015
Amendments to FRS 101 Reduced Disclosure Framework - 2014/15 cycle and other minor amendments
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 (i.e. alternative formats for the income statement and statement of financial position) 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.  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.
29 September 2015 
Revised version of FRS 101 issued

Effect for periods beginning on or after 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  (i.e. alternative formats for the income statement and statement of financial position) 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.  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.

11 December 2015
FRED 63 Draft Amendments to FRS 101 Reduced Disclosure Framework 2015/16 cycle issued

 Comment period closed on 31 March 2016.

8 July 2016
Amendments to FRS 101 Reduced Disclosure Framework 2015/16 Cycle published

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).

8 July 2016
FRED 65 Draft amendments to FRS 101 Reduced Disclosure Framework – notification of shareholders published

Comments closed on 14 October 2016.

13 December 2016
Amendments to FRS 101 and FRS 102 - Notification of shareholders 

The amendments are effective for accounting periods beginning on or after 1 January 2016.

14 December 2016
FRED 66 Draft Amendments to FRS 101 Reduced Disclosure Framework 2016/17 cycle 

Comments close on 31 March 2017

12 July 2017
Amendments to FRS 101 - 2016/17 Cycle issued

The amendments are available from when an entity applying FRS 101 first applies IFRS 16.

30 October 2017
FRED 69: FRS 101 Reduced Disclosure Framework - 2017/18 cycle

Comments close on 2 February 2018.

14 December 2017
Amended by Amendments to FRS 102 – Triennial review 2017 – Incremental improvements and clarifications

Effective for accounting periods beginning on or after 1 January 2019.  Early application is permitted provided that all the amendments to FRS 101 as a result of the triennial review are applied at the same time.

28 March 2018
Revised version of FRS 101 issued

Effective for periods beginning on or after 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  (i.e. alternative formats for the income statement and statement of financial position) 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.  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.

See above for effective date of December 2017 amendments

The amendments as a result of the Triennial review are effective for accounting periods beginning on or after 1 January 2019.  Early application is permitted provided that all the amendments to
FRS 101 as a result of the triennial review are applied at the same time.

10 May 2018
Amendments to the Basis for Conclusions FRS 101 Reduced Disclosure Framework issued

No amendments to FRS 101 have been made.

29 January 2019
FRED 70 FRS 101 Reduced Disclosure Framework - 2018/19 cycle issued

Comments closed on 30 April 2019.

11 July 2019 Amendments to FRS 101 - 2018/19 Cycle issued

The amendments take effect for periods beginning on or after 1 January 2021. If an entity applies the recognition, measurement and disclosure requirements of IFRS 17 early, the amendments to FRS 101 are applied at the same time.

Scope

FRS 101 can only be applied by entities meeting the following criteria:

  • The company must be a qualifying entity (see below);
  • it otherwise applies as its financial reporting framework the recognition, measurement and disclosure requirements of EU-adopted IFRS, but makes amendments to EU-adopted IFRS requirements where necessary in order to comply with the Act and the Regulations; and 
  • The company must state in its financial statements:

i) A brief narrative summary of the exemptions adopted

ii) The name of the parent in whose group financial statements it is consolidated; and

iii) From where those group financial statements may be obtained. 

A qualifying entity is a member of a group where the parent of that group prepares publicly available consolidated financial statements which are intended to give a true and fair view (of the assets, liabilities, financial position and profit or loss) and  that entity must be included in the consolidation. Under FRS 101, a charity may not be a qualifying entity. 

With effect for periods beginning on or after 1 January 2021 (or when the recognition, measurement and disclosure requirements of IFRS 17 are applied, if earlier), the following may not be qualifying entities:

  • entities that are both required to apply Schedule 3 to the Regulations and have contracts that are within the scope of IFRS 17 Insurance Contracts; and
  • entities that are not companies but are both required to apply requirements similar to those in Schedule 3 to the Regulations and have contracts that are within the scope of IFRS 17.

FRS 101 cannot be applied in consolidated financial statements.

Summary

FRS 101 “Reduced Disclosure Framework” (link to FRC website) sets out the disclosure exemptions (a reduced disclosure framework) for the individual financial statements of subsidiaries, including intermediate parents, and ultimate parents that otherwise apply the recognition, measurement and disclosure requirements of EU-adopted IFRS Standards.

Because of the disclosure reductions, financial statements prepared under FRS 101 do not comply with all of the requirements of EU-adopted IFRSs. Therefore they cannot contain the unreserved statement of compliance set out in IAS 1. This also means that they do not constitute “IAS accounts” under the IAS Regulation and must therefore comply with the requirements of the Companies Act 2006, including the relevant primary statement formats laid out therein. 

Entities applying FRS 101 can take exemptions from the following disclosure requirements of IFRSs:

 

IFRS Area Disclosure Exemption includes
IAS 7 Cash flow statement Complete exemption from preparing a cash flow statement and related notes.
IFRS 2* Share-based payments

Exemption from most of the disclosures required by IFRS 2 except for a description of the schemes and certain details about options exercised in the year and options outstanding at the year end. 

For a subsidiary company, this exemption applies only to arrangements involving the equity instruments of another group entity. 

For an ultimate parent, this exemption applies only to arrangements involving its own equity instruments and its separate financial statements must be presented alongside the group consolidated financial statements.
IAS 8 IFRSs issued but not effective The listing of new or revised standards that have not been adopted (and information about their likely impact) may be omitted.
IAS 36* The impairment review Paragraphs 134 and 135 of IAS 36 require extensive disclosures for each cash generating unit which contains goodwill or an intangible asset with an indefinite life. Exemption is provided from most of these requirements, in particular in relation to assumptions and sensitivities.
IFRS 3* Business combinations Exemption from many of the disclosure requirements for business combinations during and after the end of the period. Certain basic disclosures including consideration paid and a table of assets and liabilities acquired are still required.
IFRS 5* Discontinued operations Exemption from providing an analysis of net cash flows attributable to operating, investing and financing activities of discontinued operations.  All other disclosure requirements continue to apply.
IFRS 7* Financial instruments Complete exemption from all of the disclosure requirements of IFRS 7 other than for those instruments where these disclosures are still required to comply with the law. Not available to financial institutions.
IFRS 13* Fair value measurement

Complete exemption from all of the disclosure requirements of IFRS 13 other than for those instruments where these disclosures are still require to comply with the law. Once adopted, IFRS 13 replaces the fair value measurement disclosure requirements of IFRS 7 and extends them to other assets and liabilities. 

Financial institutions may not use this exemption in relation to financial instruments but may use it in relation to other assets and liabilities.
IAS 24 Related party disclosures

Exemption for related party transactions entered into between two or more members of a group, provided that any subsidiary party to the transaction is wholly owned by such a member. 

Exemption from disclosure of compensation for key management personnel and amounts incurred by an entity for the provision of key management personnel services that are provided by a separate management entity.
IAS 1 Comparatives information

Exemption from comparatives for movements on share capital, PP&E, intangible assets, investment property and biological assets. 

IAS 1 Other disclosure exemptions including Capital management

Exemption from the requirement of IAS 1 to:

  • present a statement of cash flows;
  • present a third balance sheet in some circumstances;
  • make an explicit and unreserved statement of compliance with IFRS standards; and
  • Exemption from the capital management disclosure requirements of IAS 1. Not available to financial institutions.
IFRS 1 Opening balance sheet 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.
IFRS 15 Revenue Exemption from the requirements of the second sentence of paragraph 110 and paragraphs 113(a), 114, 115, 118, 119(a) to (c), 120 to 127 and 129 of IFRS 15 Revenue from Contracts with Customers.
IFRS 16 Leases

Exemption from the requirements of paragraph 52, the second sentence of paragraph 89, and paragraphs 90, 91 and 93 of IFRS 16 Leases.

Exemption from the requirements of paragraph 58 of IFRS 16, provided that the disclosure of details of indebtedness required by paragraph 61(1) of Schedule 1 to the Regulations is presented separately for lease liabilities and other liabilities, and in total.

* = equivalent disclosures must be included in the consolidated financial statements of the group in which the entity is consolidated.

The changes to FRS 101 as a result of the UK implementation of the EU Accounting Directive allows companies to take advantage of the alternative IAS 1 formats for the income statement and statement of financial position for accounting periods beginning on or after 1 January 2016.  However companies may wish to early adopt the Accounting Regulations in order to align disclosures with those of the parent company in consolidated IFRS financial statements.

Effective date

FRS 101 is effective for periods beginning on or after 1 January 2015. Early adoption is permitted without restriction.  The revised version of FRS 101 is effective for periods beginning on or after 1 January 2015, other than amendments in relation to 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.  See note above regarding application dates for subsequent amendments to the standard.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.