FRS 3 Reporting Financial Performance
Issued October 1992. Effective for accounting periods ending on or after 22 June 1993. Amended June 1999.
FRS 3 has been superseded by FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland for accounting periods beginning on or after 1 January 2015. For more information visit:
Synopsis
FRS 3 requires a layered format for the profit and loss account to highlight a number of important components of financial performance:
- Results of continuing operations (including acquisitions)
- Results of discontinued operations Profits and losses on the sale or termination of an operation, costs of a fundamental reorganisation or restructuring and profits or losses on the disposal of fixed assets
- Extraordinary items
The effect of FRS 3 has been effectively to outlaw extraordinary items. If any were to arise, the standard requires them to be included in the earnings figure used to calculate earnings per share.
FRS 3 also requires some additional statements and notes to the financial statements:
- a statement of total recognised gains and losses – a primary financial statement that includes the profit or loss for the period together with all movements in reserves reflecting recognised gains and losses attributable to shareholders.
- note of historical cost profits – in order to be able to compare profits/losses between companies which have revalued their fixed assets and those that have not.
Last updated 21 June 2015