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). I've made it to day two! Better than most of my New Year's resolutions (where did I put that exercise ball?)
DAY TWO (6 Jan)
You might think that section 1 of FRS 102 (Scope of the FRS) is a bit of low-value filler, an introduction that is best skipped past as you read the Standard.
You'd be wrong. (Well, a bit wrong).
A lot of section 1 is pretty dull, obvious text; nevertheless, there are some important points hidden away here. In particular, it's worth noting that:
• There are some specific paragraphs for public benefit entities in FRS 102 (these are all labelled 'PBE').
• The FRS requires adoption of some specific additional IASs/IFRSs in certain cases. Entities whose shares are publicly traded (step forward, AIM listeds) must follow IAS 33 Earnings Per Share and IFRS 8 Operating Segments, as should anyone making these disclosures voluntarily. Relevant entities will need to follow IFRS 6 Exploration for and Evaluation of Mineral Resources (as prescribed in s34).
• Subsidiaries and ultimate parents of groups (where group accounts are made publicly available) can reduce the disclosures in their individual entity accounts (in a similar way to those using FRS 101). There's a list of qualifying conditions in 1.11 including shareholder approval for use of the exemptions. The list of exemptions includes cash flow statements, some related party transactions, and financial instrument and share-based payment disclosures. Unlike FRS 101, charities are permitted to use the disclosure reductions. See 1.12 for the detailed list.
• There are some new transitional provisions added in the August 2014 version of the standard, to deal with the changes applied in that version to financial instruments and hedge accounting.
That about wraps it up for section 1. Don't be fooled - most sections will take quite a bit more than one day to cover... any guesses as to what I'll move onto tomorrow?
P.S. If you missed yesterday's instalment click here