IFRS for SMEs and FRS 102 are here…..

By now, you should have heard something about UK and Irish GAAP being superseeded at some point by IFRS but its buried deep in the recesses of your mind, behind that CT600 return thats due by the end of the month or that pesky AR01 date that keeps nagging you, with the poetential for a row with the Client over late fees and a general train wreck, but you just cannot quite get into it…..

Well, somewhere along the line, you really do need to find sometime to think about IFRS for SME’s and FRS 102. We will be blogging a series of articles over the next few months about where IFRS came from, how you measure the most important elements of the financial statements under it, point out some of the key differences with UK GAAP and where to find out more details.

So lets ease into this nice and gradually, not too much for your first day……

FRS 102 is the Financial Reporting Council’s derivation of the IASB’s IFRS for SME’s. You fall under it’s remit if you don’t use EU-adopted IFRS, FRS 101 or FRSSE. Its principles should be applied to all accounting periods that start after 1 January 2015.

For example,if your accounting period started on 1 January 2015, then you will apply to your financial statements period ending 31 December 2015 or if your accounting period starts on 1 May 2015, your financial statements ending 30 April 2016. You are also obliged to prepare comparative figures for the previous period based on FRS 102 (so when you present your financial statements for the year ended 31 December 2015 under FRS 102, you will also need to show comparatives for the year ended 31 December 2014 on a FRS 102 basis).

Now you may well be wondering how FRSSE 2015 fits into the picture – well it is a little confusing. You can still apply FRSSE if your company is under two of three criteria of Turnover £ 6,500,000 pa, Balance Sheet Total £ 3,260,000, Employees 50.

But the FRC have not only signalled the intention to move away from FRSSE, they have issued FRED 59 Draft amendments to FRS 102, the comment period for which closes on 30 April 2015, proposing that FRS 102 replace FRSSE for accounting periods commencing 1 January 2016 onwards. There is also FRED 58 Draft FRS 105, which proposes micro entity IFRS reporting (‘FRS 102 Lite’), with possible criteria being under two of three of Turnover £ 632,000 pa, Balance Sheet Total £ 316,000, Employees 10.

If you are currently on FRSSE and happy with it, there probably isn’t any point changing over before you have too.

But if you haven’t used FRSSE up to now, there is very little point adopting it, as it will quickly be replaced.

Grasp the nettle, adopt FRS 102 !


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