UK COMPANY ACCOUNTS The New Reporting Regime. FACTSHEET 01 - OVERVIEW (updated 2 December 2015)

Transcription

1 UK COMPANY ACCOUNTS The New Reporting Regime FACTSHEET 01 - OVERVIEW (updated 2 December )

2 Contents Introduction... 2 UK financial reporting framework... 3 What do you need to do now?... 5 Page 1

3 Introduction UK GAAP is dead! Long live UK GAAP! UK financial reporting is going through fundamental change that will have a significant effect on the accounts of most UK companies. After what has seemed to be an extremely long gestation period the UK authorities (in the form of the UK Government and the Financial Reporting Council) have, we hope, finally set a clear path for the requirements of UK company accounting. In this first of a series of Factsheets that we will publish over the coming months, we provide an overview of the reporting framework for UK company accounts that will apply for accounting on or after 01 January and, for many, 01 January Page 2

4 UK financial reporting framework The UK financial reporting regime that will apply in future is summarised in the following table: Source Key points Application date International Financial Reporting Standards (IFRS) adopted by EU Available for any entity which wishes to use it or which is required to do so Now FRS 100 Application of Financial Reporting Requirements Framework under which an entity decides which UK accounting standards apply FRS 101 Reduced Disclosure Framework Reduced disclosure framework for qualifying entities (parent or subsidiary) which are included within group accounts under EUadopted IFRS that apply the recognition and measurement requirements of EU-adopted IFRS FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland A single financial reporting standard that applies to entities that are not applying EU-adopted IFRS, FRS 101 or the FRSSE Essentially this is the new UK GAAP Page 3

5 Source Key points Application date FRS 102 with reduced disclosures The Financial Reporting Standard for Smaller Entities (effective Jan ) (FRSSE) FRS 102 Provisions applicable to small entities FRS 105 The Financial Reporting Standard applicable to the Micro-entities Regime Reduced disclosure options for qualifying entities (parent or subsidiary) which are included within group accounts under FRS 102 that apply the recognition, measurement and presentation requirements of FRS 102 There are a number of conditions for the use of the disclosure exemptions Essentially FRSSE (effective April 2008) with amendments to reflect the new reporting framework To be withdrawn for accounting on or after 01 January Small companies will fall under either FRS 105 (if eligible) or FRS 102 Provisions applicable to small companies Section 1A Small Entities of FRS 102 which sets out the presentation and disclosure requirements for small entities The recognition and measurement requirements of FRS 102 will apply in full A standalone standard for micro-entities Based on FRS 102 with substantial simplifications appropriate to the size of a micro-entity Page 4

6 Which reporting regime applies to your company? The reporting regime set out in the table is not fixed. An entity has the option of reporting under a more comprehensive framework if it so chooses. For example, a company that may qualify as a micro-entity does not have to report under FRS 105; it can choose instead to report under FRS 102 Provisions applicable to small entities. There are a number of factors to take into consideration when deciding which regime to use. It may not always be sensible or, indeed, permitted to report under the least complex standard relative to the size of the entity. We will take a closer look at size thresholds and eligibility criteria in UK Company Accounts Factsheet 02. What do you need to do now? You need to consider now which version of UK GAAP to adopt and whether to adopt earlier than the dates referred to in the table. In some cases you may have no choice but to adopt a specific version. Where you do have a choice there may be a longer term advantage to choosing a higher version of UK GAAP than is strictly necessary. To discuss any of these points or to find out more about the new financial reporting regime under UK GAAP please contact Peter Edwards, Head of Audit and Assurance Services e: peter.edwards@alliotts.com t: Note s: The information set out in this Factsheet is based on our understanding of the financial reporting provisions as at 2 December r The content of this Factsheet has been provided for general guidance only.it does not necessarily stand on its own and no responsibility for loss occasioned by any person acting or not acting as a result of this material can be accepted by the writer or Alliotts or any of its partners and employees. Alliotts are registered to carry on audit work in the UK and regulated for a range of investment business activities; and licensed to carry out the reserved legal activity of non-contentious probate in England and Wales by the Institute of Chartered Accountants in England and Wales. Page 5