To mark this momentous year for UK GAAP, I'm embarking on a mission to work my way through FRS 102, reading a portion on each working day of 2015 and writing a short blog entry on my thoughts and musings (be they few or many).
It's Tuesday and while wintry showers beat against the window, I'll put an extra coal on the fire (we're a bit old-fashioned here at the Mercia office) and return to section 5 of FRS 102...
DAY SEVEN (13 Jan)
Here's a small but important presentation change: discontinued operations. FRS 3 defines these at length - in particular, if an operation (let's call it 'Omega', as that makes it sound exciting in a kind of James Bond sense) is discontinued within the earlier of three months after the year end and the date of approval of the account, it still counts as discontinued. Conversely FRS 102 briefly defines discontinued operations as those disposed of in the period, so 'Omega' will be treated as continuing in the year. This won't affect transition balance sheets (as we'll outline - probably much later in the year - in s35) but will be an issue from now on.
Here's another change from FRS 3: exceptional items. Hunt as you will for the term 'exceptional item' in FRS 102 and you won't find it. (OK, if you want to be picky - it's on p254 in the recommendation from the Accounting Council, but it's referring back to FRS 3.) Instead we disclose the gains and losses which are material to users and if that requires 'additional line items, headings and subtotals' (5.9) then so be it. Expect lots more flexibility, attempts to 'creatively' manage exceptional items by clients and stern words from auditors.
NB we're not talking about 'extraordinary items'. These ARE separately dealt with in 5.10-5.10A, but they are by nature, extraordinary (highly abnormal). If you lost productive time because your workforce saw a strange light in the sky above the car park and woke up the next morning with webbed fingers and an inability to speak other than in Swahili, then these paragraphs are for you. Otherwise I'd happily ignore them.
See you all tomorrow...
P.S. If you missed yesterday's instalment click here