FRS 100 Application of Financial Reporting Requirements sets out a new financial reporting regime for the UK entities effective from 1 January 2015. It explains which standards apply to which entity, when an entity can apply the reduced disclosure framework, and when an entity should follow a SORP.
Published: November 2012; Revised September 2015. Effective for accounting periods beginning on or after 1 January 2015.
The objective of FRS 100 is to set out the applicable financial reporting framework for entities preparing financial statements in accordance with legislation, regulations or accounting standards applicable in the UK and Republic of Ireland.
It applies to financial statements that are intended to give a true and fair view.
FRS 100 as issued in 2012 set out a financial reporting framework applicable from 1 January 2015; the revised standard, issued in 2015 sets out the financial reporting framework applicable from 1 January 2016.
The options available for preparing financial statements under FRS 100 as issued in 2012 are summarised below:
||FRSSE||FRS 102 (and FRS 103)||FRS 101||EU-adopted IFRS|
|Entities eligible for small companies regime||✓||✓||✓||✓|
|Entities not small and not required to apply EU-adopted IFRS||
|Entities required to apply EU-adopted IFRS||
Under the new regime it was originally intended that the Financial Reporting Standard for Smaller Entities (FRSSE) would continue to be available for those companies eligible to use it. As a result, consequential amendments were made to the FRSSE.
FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland was issued as a single standard based on the IFRS for SMEs, to replace all extant FRSs, SSAPs and UITF abstracts (with the exception of the FRSSE). Where an entity applies FRS 102 and also has insurance contracts, FRS 103 would also apply.
FRS 101 Reduced Disclosure Framework – Disclosure exemptions from EU-adopted IFRS for qualifying entities, was published alongside FRS 100. It applies to the individual accounts of qualifying entities. The recognition, measurement and disclosure requirements of EU-adopted IFRS are applied, but with a reduction in the required level of disclosure.
As a result of the implementation of the EU Accounting Directive, the introduction of FRS 105 The Financial Reporting Standard for the Micro-entities Regime and the withdrawal of the FRSSE, FRS 100 was revised in 2015. The six options now available for preparing financial statements are:
||FRS 105||FRS 102 section 1A||FRS 102 (and FRS 103)||FRS 101||EU-adopted IRFS|
|Entities eligible for micro-entities regime
|Entities eligible for small companies regime
|Entities not micro or small and not required to apply EU-adopted IFRS
|Entities required to apply EU-adopted IFRS||✓|
FRS 105 The Financial Reporting Standard for the Micro-entities Regime is based on FRS 102, but adapted to reflect the simpler nature and smaller size of micro-entities and the legal requirements applying to them.
FRS 102 The Financial Reporting Standard as issued in 2015 is a revised version of the earlier standard that:
The 2014 version of FRS 103 remains relevant for companies applying FRS 102 that have insurance contracts.
Minor amendments were also made to FRS 101 Reduced Disclosure Framework – Disclosure exemptions from EU-adopted IFRS for qualifying entities in 2015, and the amended standard forms part of the new financial reporting framework prescribed by FRS 100 (2015).
Where an entity prepares its financial statements in accordance with FRS 101, FRS 102 (or the FRSSE prior to its withdrawal), a statement of compliance needs to be included in the notes. Entities preparing financial statements in accordance with FRS 102 Section 1A are encouraged to include a statement of compliance.
If an entity’s financial statements are prepared in accordance with FRS 102, (or the FRSSE prior to its withdrawal), SORPs will apply in the circumstances set out in those standards. When a SORP applies, the entity should state in its financial statements the title of the SORP and whether its financial statements have been prepared in accordance with the SORP’s provisions that are currently in effect. In the event of a departure from those provisions, the entity should give a brief description of how the financial statements depart from the recommended practice set out in the SORP. You can view a summary of the current status of SORPs on the FRC's website.
The Companies Act exempts, certain to subject conditions, an intermediate from the requirement to prepare consolidated financial statements where its parent is not established under the law of an EEA state. One of the conditions is that the group accounts are drawn up in a manner equivalent to consolidated accounts so drawn up.
The Application Guidance to FRS 100 provides guidance on interpreting the meaning of equivalence in both of these cases.
More information on the new financial reporting regime, including the full range of resources, is available on the new UK GAAP section of our website icaew.com/newukgaap
This page was last updated on 12 June 2017