Timelines for Transition to FRS (the new UK GAAP)
Financial Reporting Council (FRC) has issued three new accounting standards collectively known as Financial Reporting Standards (FRS) which will replace the existing UK GAAP. Synopses of the three FRS standards are given below:
FRS 100: Application of Financial Reporting Requirements
This FRS explains the principles for application of financial reporting requirements for entities in the UK and the Republic of Ireland (EIRE). Issued in November, 2012, it becomes effective from 1st January, 2015. This Standard also suggests options available to entities (in the UK and EIRE) in preparing their financial statements under the new regime.
FRS 101: Reduced Disclosure Framework
This Standard provides disclosure exemptions from EU-adopted IFRS to individual accounts of qualifying parent and subsidiary entities. Recognition, measurement and disclosure requirements are applied in a reduced level of disclosure. It was issued in November, 2012 and becomes effective from 1st January, 2015.
FRS 102: Financial Reporting Standard applicable in the UK and Republic of Ireland
It is a single reporting standard and is based on IFRS for Small and Medium Entities. It incorporates additional financial disclosure and also includes other qualifying entities like charities, which was not included under FRS 101. It was issued in March, 2013 and becomes effective from 1st January, 2015.
Below mentioned steps are critical for successful transition to FRS:
Plan an Early Adoption:
We understand that most of the entities would have opted for early adoption; if not, it’s not too late; you are well placed to start right now.
FRS 101, FRS 102 and EU approved IFRS can be adopted with immediate effect from the date of its release. However, early application of FRS 102 is restricted to accounting periods ending on or after 31 December 2012.
Transition and Comparatives:
Entities currently under UK GAAP and IFRS will have to transition to FRS 101, FRS 102 or full EU-adopted IFRS for accounting periods beginning on or after 1st January 2015, with comparatives required for 1st January 2014 onwards. Also, this will require entities which have 31st December as their accounting year end, to prepare a transition balance sheet as at 31st December 2014. Implications of the new regime should be understood, for ex: a required change in iXBRL taxonomies, to help assess and determine the timing of their transition.
|Transition Accounting Period starting on or after|
|Transition Balance Sheet as at|
Impact on iXBRL filing with HMRC and Companies House:
As the XBRL taxonomies change, corporation tax filers will need to pay more attention to the XBRL tags applied to the data in financial statements attached to their form CT600. There are Managed Tagging Service (MTS) providers like DataTracks who can help corporations prepare their iXBRL files with accuracy using new taxonomies. DataTracks was the first service provider to be recognized by HMRC.
About DataTracks: DataTracks Limited is a subsidiary of DataTracks Services Limited. With a track record of more than 10 years, DataTracks is a global leader in preparation of financial statements in XBRL and iXBRL formats for filing with regulators. DataTracks prepares more than 12,000 XBRL statements annually for filing with regulators such as SEC in the United States, HMRC in the United Kingdom, Revenue in Ireland, ACRA in Singapore and MCA in India.
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