New UK GAAP – FRS 100, 101 & 102 : A Quick Overview
The Financial Reporting Council (FRC) in UK has published three standards which form the basis of the new UK GAAP. These standards are applicable in UK and in Ireland. This framework will be effective for the accounting periods beginning from 1st January 2015. The FRC has also permitted the usage of these new standards for accounting periods ending on or after 31st December 2012, provided that there is no conflict with the requisites of the present SORP (Statement of Recommended Practice).
The three FRS Standards:
- FRS 100 – Application of Financial Reporting Requirements
- FRS 101 – Reduced Disclosure Framework
- FRS 102 – The Financial Reporting Standard applicable in the UK and Republic of Ireland
FRS 100 – Application of Financial Reporting Requirements
The objective of FRS 100 is to set the financial reporting framework according to the legislation, regulations or accounting standards in UK and Ireland. FRS 100 will be applicable for financial statements pertaining to assets, liabilities, financial position and profit or loss for a period which is meant to provide a true and fair view.
FRS 101 – Reduced Disclosure Framework
The FRS 101 sets the reduced disclosure framework which deals with disclosure exemptions for qualified entities (individual financial statements of subsidiaries, including intermediate parents, and ultimate parents) that usually apply the recognition, measurement and disclosure requisites of EU-adopted IFRSs.
FRS 102 – The Financial Reporting Standard applicable in the UK and Republic of Ireland
The FRS 102 replaces a major portion of the UK financial reporting standards. This is applicable for large and medium-sized UK entities which includes public benefit entities, retirement benefit plans and financial institutions. Hence, the scope of FR 102 standard would be greater than the other standards. This Standard has 350 pages compared to the existing UK GAAP which is 3000 pages. The reduction in the pages shows that the financial reporting standards are modernized and simplified. This standard is also based on the IFRS for SMEs.
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FAQs: New UK GAAP – FRS 100, 101 & 102: A Quick Overview
1. What is the New UK GAAP?
The New UK GAAP consists of three standards published by the Financial Reporting Council (FRC) in the UK: FRS 100, FRS 101, and FRS 102. These standards are effective for accounting periods beginning on or after 1st January 2015 and are applicable in both the UK and Ireland.
2. What is FRS 100?
FRS 100, “Application of Financial Reporting Requirements,” sets the financial reporting framework according to UK and Ireland legislation, regulations, or accounting standards. It is applicable to financial statements that provide a true and fair view of assets, liabilities, financial position, and profit or loss.
3. What is FRS 101?
FRS 101, “Reduced Disclosure Framework,” deals with disclosure exemptions for qualified entities such as individual financial statements of subsidiaries, including intermediate and ultimate parents. It applies the recognition, measurement, and disclosure requirements of EU-adopted IFRSs with reduced disclosures.
4. What is FRS 102?
FRS 102, “The Financial Reporting Standard applicable in the UK and Republic of Ireland,” replaces a significant portion of the previous UK financial reporting standards. It is applicable to large and medium-sized entities, including public benefit entities, retirement benefit plans, and financial institutions. FRS 102 simplifies and modernizes the financial reporting standards, reducing the previous 3000 pages to 350 pages.
5. When can the new standards be applied?
The new standards can be applied for accounting periods ending on or after 31st December 2012, as long as there is no conflict with the current Statement of Recommended Practice (SORP).
6. How does FRS 102 differ from the previous UK GAAP?
FRS 102 significantly reduces the volume of standards from 3000 pages to 350 pages, making the financial reporting requirements more streamlined and accessible. It is based on the IFRS for SMEs, making it more aligned with international standards.
7. What is the significance of iXBRL and XBRL in financial reporting?
iXBRL (Inline eXtensible Business Reporting Language) and XBRL (eXtensible Business Reporting Language) are formats used for the electronic transmission of business and financial data. They enhance the accuracy and efficiency of financial reporting by allowing data to be easily shared and analyzed by regulators and other stakeholders.
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