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FRS 102: Group accounts and business combinations under UK GAAP

FRS 102 Section 9 Consolidated and Separate Financial Statements explains when a parent entity must prepare group accounts, the treatment of special purpose entities and the consolidation procedures. Section 19 Business Combinations and Goodwill sets out the accounting treatment under the purchase method.

The standard

The requirements regarding consolidated financial statements, business combinations and goodwill are set out as part of FRS 102. However, individual sections of the standard should not be looked at in isolation as other parts may be relevant.

FRS 102 is regularly updated and amended by the Financial Reporting Council (FRC). For the full text of FRS 102, guidance on which version of the standard to apply and notes on recent amendments, see our main FRS 102 page.

ICAEW guides and support

Helpsheets and factsheets

Groups and consolidated accounts under FRS 102

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13-03-2020

Technical helpsheet to help ICAEW members to understand key aspects of accounting for groups under FRS 102.

Hive up under FRS 102

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01-12-2015

Technical helpsheet covering the basic accounting requirements for a 'hive up' restructure within a group of companies.

Bloomsbury Accounting and Tax Service

Eligible firms have free access to Bloomsbury Professional's comprehensive online library, comprising around 80 titles from some of the country's leading tax and accounting subject matter experts. Find out who is eligible and how you can access the Bloomsbury Accounting and Tax Service.

Business combinations and goodwill

A chapter on financial reporting of business combinations and goodwill under FRS 102, section 19, including information on accounting for positive and negative goodwill. This key title by Steve Collings has been comprehensively updated to reflect all changes made to UK and Ireland accounting standards up to November 2022.

Intangible assets other than goodwill

A detailed, practical chapter on financial reporting of intangible assets other than goodwill under FRS 102 section 18, containing many examples. Includes sections on initial recognition, initial measurement, research and development costs, subsequent measurement, amortisation, software/website development costs and disclosure requirements.

Property, plant and equipment

A detailed, practical chapter on financial reporting of property, plant and equipment under FRS 102, section 17 and FRS 105, section 12. Includes sections on initial recognition, subsequent measurement, depreciation, impairment of assets, derecognition and disclosure requirements, with many worked examples.

Impairment of Assets

A chapter on financial reporting of impairment of assets under UK GAAP. Sections include: Impairment of inventory; Impairment of assets other than inventories; Reversal of an impairment loss; Disclosure requirements. This practical manual focuses on unlisted companies and has been comprehensively updated to reflect all changes made to UK and Ireland accounting standards up to November 2022.

Consolidated financial statements

A chapter focusing on consolidated financial statements (or 'group accounts' as they are commonly referred to in practice) under FRS 102. The chapter covers Companies Act 2006 requirements, control relationships, accounting policies, accounting reference dates, overview of the consolidation process, consolidated balance sheet, consolidated profit and loss account and the consolidated cash flow statement.

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eBooks

The Library provides full text access to a selection of key business and reference eBooks from leading publishers. eBooks are available to logged-in ICAEW members, ACA students and other entitled users. If you are unable to access an eBook, please see our Help and support advice or contact library@icaew.com.

Business combinations and goodwill

Fully updated guide focusing on each area of the financial statement in detail with illustrative examples. This chapter gives a comparison of FRS 102 Section 19 and IFRS, and covers the requirements for business combinations and goodwill, disclosures, and group reconstructions.

Consolidated and separate financial statements

Fully updated guide focusing on each area of the financial statement in detail with illustrative examples. This chapter gives a comparison of FRS 102 Section 9 and IFRS, and covers the requirement to present consolidated financial statements, the definition of a subsidiary, special purpose entities (SPEs), subsidiaries excluded from consolidation, consolidation procedures, accounting for associates and jointly controlled entities in individual and separate financial statements, group reorganisations, and other topics.

Terms of use: You are permitted to access, download, copy, or print out content from eBooks for your own research or study only, subject to the terms of use set by our suppliers and any restrictions imposed by individual publishers. Please see individual supplier pages for full terms of use.

Example accounts

Model accounts and disclosure checklists for UK GAAP
The ICAEW Library can provide model accounts and disclosure checklists for FRS 101, FRS 102, FRS 102 Section 1A, FRS 103 and FRS 105. The examples cover a broad range of entities, including small companies, charities, groups, LLPs and micro-companies.


External resources

Some guides and comparisons that we link to may pre-date the latest amendments to this standard. While these resources contain useful information, please treat them with appropriate caution.

From the FRC

Fact Sheet 6 – FRS 102: Business Combinations
FRC, December 2018
Staff factsheet giving a high-level overview of the requirements for entities applying FRS 102 that undertake a business combination for the first time. It provides an outline of the purchase method, discusses the separation of intangible assets from goodwill, and presents several illustrative disclosures.


Further reading

Manuals and handbooks

The ICAEW Library stocks the latest UK GAAP handbooks and manuals. You can browse all our books on FRS 102 and consolidated accounts or business combinations or request any of the following popular titles by contacting us on +44 (0)20 7920 8620, by web chat, or at library@icaew.com

GAAP 2019: UK reporting – FRS 102 (Volume B)
Deloitte, Croner-i, 2019
Comprehensive manual explaining how to apply FRS 102, with worked examples and extensive interpretation and guidance. The chapter on business combinations and goodwill covers the definition of business combinations, purchase method, disclosures, and group reorganisations. The chapter on consolidated and separate financial statements covers the requirement to present consolidated financial statements, inclusion of special purpose entities, consolidation procedures, and disclosures.

Manual of accounting: UK GAAP
PwC, Lexis Nexis, 2019
Practical guide with worked examples throughout, dealing with day-to-day issues as well as complex questions. The chapter on business combinations and goodwill looks at the identifying and structuring a business combination, the purchase method, and other topics. The chapter on consolidated and separate financial statements looks at the form of consolidated financial statements, exemptions, parent and subsidiaries, special purpose entities, subsidiaries excluded from consolidation, consolidation procedures, and other topics.

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