Is your SME ready for FRS102?

Milsted Langdon is reminding small and medium-sized enterprises (SMEs) that a new accounting standard could affect their financial affairs.

Nigel Fry, General Practice Partner at Milsted Langdon said: “The proposed changes of the new UK GAAP [Generally accepted accounting principles], known as FRS102, will align the requirements of FRS102, which is generally used by smaller firms, with those of the relevant International Financial Reporting Standard; as used by larger organisations.”

The Financial Reporting Council (FRC) said the changes were needed as the complexity of the existing rules had led to ‘potential unintended consequences’ which meant that they were not only more arduous to apply, but they could also result in ‘inappropriate accounting outcomes’.

The FRC has launched a consultation on amendments to accounting standard FRS102 in a bid to simplify rules surrounding share and share option awards for smaller firms. In its draft, called FRED61, the FRC has set out amendments to the standard, which deals with share-based payment transactions with cash alternatives. The FRC is looking to make the changes for accounting periods beginning on or after 1 January 2015. When a business adopts FRS102, comparative accounts for the year prior to conversion will also be needed. The comment period on this proposal closes on 1 June 2015.

Implementing FRS102 can be complex, but if you need advice about how FRS102 will affect you and what you need to do to implement the changes, or if you would like to find out more about payroll services that are available, please contact us.

Posted in Press Releases.