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The Financial Reporting Council (FRC) has completed a triennial review of FRS 102 and confirmed the simplification of the measurement of directors’ loans to small entities, following the interim relief granted earlier this year. This is part of a package of amendments announced today.

The other principal amendments to FRS 102:

1. require fewer intangible assets to be separated from goodwill in a business combination;
2. permit investment property rented to another group entity to be measured by reference to cost, rather than fair value;
3. expand the circumstances in which a financial instrument may be measured at amortised cost, rather than fair value; and
4. simplify the definition of a financial institution.

Amendments are also made to provide relief from recognising tax payable when a trading subsidiary expects to make a distribution of a gift aid payment to its charitable parent, and to incorporate the new small entities and micro-entities regimes in the Republic of Ireland (the latter by amendments to FRS 105).  Editorial amendments and clarifications will increase the ease of use of the standards.

Paul George, Executive Director, Corporate Governance & Reporting, said,

“We are grateful for stakeholders’ engagement with the triennial review, which has enabled us to identify and respond to implementation issues following the introduction of FRS 102 from 2015.  As a result of these amendments, FRS 102 has been simplified and will be more cost-effective and easier to use.”

In general these amendments are effective for accounting periods beginning on or after 1 January 2019, with early application available.  The amendments to incorporate the small entities and micro-entities regimes in the Republic of Ireland are effective for accounting periods beginning on or after 1 January 2017.

Notes to editors

1. The Financial Reporting Council’s (FRC) mission is to promote transparency and integrity in business.  The FRC sets the UK Corporate Governance and Stewardship Codes and UK standards for accounting and actuarial work; monitors and takes action to promote the quality of corporate reporting; and operates independent enforcement arrangements for accountants and actuaries. As the competent authority for audit in the UK the FRC sets auditing and ethical standards and monitors and enforces audit quality.
2. The following documents are referred to above:

• Amendments to FRS 102 – Triennial review 2017 – Incremental improvements and clarifications (PDF);
• FRS 102 The Financial Reporting Standard applicable in the UK and Republic or Ireland (PDF); and
• FRS 105 The Financial Reporting Standard applicable to the micro-entities Regime (PDF).
• The Impact Assessment and Feedback Statement of the Triennial Review 2017 (PDF) is also availble here.

3. Revised editions of all UK and Ireland accounting standards will be issued early in 2018 to reflect these amendments, and any others that have been made since the most recent edition was issued.
4. Versions of the XBRL FRC taxonomies that reflect the amendments made to FRS 102 will be released shortly.

Contact the Press Office

Alana SinnenCommunications Manager

• +44 020 7492 2395
  07949 005526
• a.sinnen@frc.org.uk