UK GAAP update 22 March 2018 DOWNLOAD THE SLIDES TO ACCOMPANY THE WEBINAR FROM THE RESOURCES PANEL ON THE LEFT OF YOUR SCREEN THE WEBINAR WILL BEGIN SHORTLY ICAEW 2018
UK GAAP update 22 March 2018 ICAEW 2018
Introduction Marianne Mau Technical Manager ICAEW
Today s presenters Jenny Carter Director UK Accounting Standards Danielle Stewart, OBE RSM UK Tax and Accounting
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Contents Brief background to the Triennial review 2017 When is it effective? What's changed? What s not changed? What s next? Q&A
Brief background FRS 102 effective from 1 January 2015 Periodic reviews promised Initial feedback sought March 2016 FRED 67 issued March 2017 FRED 68 issued September 2017 Triennial review 2017 amendments issued December 2017
What s changed? Directors loans to small entities Intangible assets in a business combination Investment property rented to another group entity Classification of basic financial instruments Definition of a financial institution
What s changed? Gift aid Small entities and micro-entities regimes in Republic of Ireland Other changes
When is it effective? Mandatory for accounting periods beginning on or after 1 January 2019 Early application available, apply all changes together except: Directors loans Tax effects of gift aid
Poll -Which of the following areas are of greatest interest to you?
Directors loans Simplification confirmed, with some extensions For small entities, loans from a director or close family member can be measured at transaction price, when that group of people includes a shareholder. Also applicable to LLPs Intended to provide relief to small ownermanaged businesses
Intangible assets Fewer intangibles to be separated in a business combination Intangibles to be separated if they meet the recognition criteria, arise from contractual or legal rights and are separable Can choose to separate more apply policy consistently Applies prospectively, don t adjust any previously recognised intangibles.
Investment property Accounting policy choice for investment property rented to another group entity. Option to apply retrospectively or use fair value as deemed cost at date of transition to amendments. All other investment property at fair value, no undue cost or effort exemption.
Classification of financial instruments Principle-based description of a basic financial instrument. Cash flows on specified dates that constitute repayment of the principal advanced together with reasonable compensation for the time value of money, credit risk and other basic lending risks and costs. Supplements the existing rules-based conditions.
Definition of a financial institution List of entities with a catch-all. Catch-all simplified, entities whose principal activity is similar to those listed. Stockbrokers and retirement benefit plans deleted. But all entities ensure sufficient disclosure about financial instruments, consider additional disclosure when risks from financial instruments are particularly significant.
Gift aid Payments by a subsidiary to its parent Gift aid payment is a distribution to owners Only recognise a liability for future payments when there is a legal obligation Recognise tax effects in profit or loss when gift aid payment is probable within nine months of the reporting date
Other changes Improved clarity and readability Operating profit Cash flow statement Reconciliation to cash flow from operating activities Net debt reconciliation Debt for equity swaps
FRS 105 Changes consistent with FRS 102, when relevant Very little change to recognition or measurement Disclosure more closely aligned with company law
What s not changed? No amendments yet for major changes in IFRS (expected credit loss model, IFRS 15 and IFRS 16) No change to control model (IFRS 10), but new disclosure of unconsolidated special purpose entities No change to revenue recognition re separately identifiable goods and services
Poll - Are you or your clients considering early adoption of the Triennial review 2017 amendments?
What s next? Evidence gathering in relation to major IFRS, once implemented by IFRS reporters Periodic review every 4-5 years Emerging issues case by case basis
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Faculty resources Visit icaew.com/newukgaap
Questions Jenny Carter Director UK Accounting Standards Danielle Stewart, OBE RSM UK Tax and Accounting
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Future webinars and events Webinars 01 May Transition to IFRS 15 31 May Financial Instruments under FRS 102 topical issues 19 Jun IFRS Update Visit icaew.com/frfevents for details of our upcoming webinars Events 13 Apr IPSASB Strategy and Work Plan 2019-2023 From 19 April - Financial Reporting Essentials Roadshows 21 Nov Financial Reporting Conference Visit icaew.com/frfevents for details of upcoming events
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ICAEW 2018