FRS 102 Centre - frequently asked questions

The biggest change in UK accounting for a generation

New UK GAAP is coming. Are you ready? Implementing the new FRS 102 standard can be complex. On this page we have answered some frequently asked questions.

What is FRS 102?

Important changes have been made to UK GAAP with the introduction of Financial Reporting Standard 102 (FRS 102). FRS 102 is the biggest development in UK accounting for a generation and brings with it significant changes to how UK GAAP accounts will be prepared for the future. The precise impact of FRS 102 will differ from one company to another. For some, the impact could be minimal but for many others the devil will be in the detail.

Click below for more information on:
Commercial & Accounting implications
Tax implications

You can also download the FRS 102 Guide

Which companies are affected?

The new standard applies to medium and large companies from 1 January 2015 and with small companies coming within its scope from 1 January 2016.

Can I continue to apply current UK GAAP?

No, unless you are an eligible entity applying the FRSSE, which will continue to apply for 2015. For other entities, FRS 102 replaces all existing FRSs, SSAPs and UITFs for accounting periods beginning on or after 1 January 2015. Most of the existing SORPs are being updated although some are being withdrawn when the new standards come into effect.

Is early adoption permitted?

Yes, FRS 102 can be adopted early for accounting periods ending on or after 31 December 2012. It may be that introduction of FRS 102 will bring with it significant advantages: for example, it could initially improve tax cash flows.

If you are thinking of starting a new business it may be a good idea to apply the new standards early to avoid changing frameworks within a short period of time. Please contact us today to discuss your early adoption of FRS 102.

Can I switch from using EU-adopted IFRS to using FRS 102?

Yes, as long as you are a company that voluntarily prepares their accounts under EU-adopted IFRS and you have not previously switched in the last five years. If you are part of a group, certain consistency criteria must also be met.

What are the commercial and accounting implications?

Implementation of FRS 102 brings with it significant changes to how accounts will be prepared. Our commercial and accounting implications page gives an overview of how reported profits may change, how the balance sheet could be significantly affected, the effects on banking covenants and other commercial and practical considerations and ultimately, how accounts will look different following the transition.

Watch our “90 second guide to the commercial & accounting implications of FRS 102” here.

Will there be implications on tax?

The implementation of FRS 102 will have a significant impact on the accounts of many UK companies, and these changes potentially have tax implications. Our tax implications page gives an overview of the tax computations, potential impacts on profits and transitional adjustments a firm may face on implementation of FRS 102.

Watch our “90 second guide to the tax implications of FRS 102” here.

What should I do now?

It is extremely important that you start preparing for FRS 102 now, even if you are not planning on adopting early, to ensure a smooth transition to the new standard. We recommend you start planning as soon as you can.