The government has published its plans for implementing a new EU Accounting Directive consolidating legislation on financial reporting. The new UK GAAP (Generally Accepted Accounting Principles) took effect on 1 January, introducing one of the biggest shake-ups in financial reporting in a generation. It includes four key standards, including the financial reporting standard FRS102, which is mandatory for accounting periods beginning on or after 1 January 2015. It will affect most large and medium-sized UK businesses, including public benefit entities, retirement benefit plans and financial institutions. Small companies are expected to be brought under the scope of FRS102, with simplified disclosure, for accounting periods commencing on or after 1 January 2016, although early adoption is available.
FRS102 is the new UK GAAP standard and so will replace all current FRSs (Financial Reporting Standards) and SSAPs (Statements of Standard Accounting Practice). Topics where the accounting treatment under FRS102 is substantially different from existing UK GAAP include:
- business combinations
- deferred tax
- financial instruments
- goodwill and intangible assets
- holiday pay
- investment property
- layout and format of accounts.
These changes will affect all companies that file statutory accounts as FRS102 concerns disclosure in company accounts and changes to accounting policies. Clearly, the transition to FRS102 will create challenges for many businesses and expert accountancy advice will be more important than ever, to avoid errors resulting in additional costs for correction.
For information about how our audit, accountancy and tax services in Bath, Bristol, London, Taunton and Yeovil can help you, please contact us for a free, no obligation, initial consultation.
Link: Further information