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FRS 102 What happens next?

With outreach activity for the next periodic review of FRS 102 getting underway in 2021, Danielle Stewart considers what might be in store.

The first review of FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland, FRS 102 - What happens next which was mandatory for years commencing on or after 1 January 2019, concentrated on making the standard easier to use, with incremental improvements and clarifications. The trickier issue of updating FRS 102 to reflect major developments in international standards – namely IFRS 9 Financial Instruments, IFRS 15 Revenue and IFRS 16 Leases – was held over to a future update of the standard in order to learn from IFRS implementation experience. With outreach work on the next periodic review of FRS 102 set to start in early 2021, this article considers the factors that might drive any changes.

The UK also has the advantage of a separate micro company standard, FRS 105 The Financial Reporting Standard applicable to the Micro-entities Regime, which has simplified measurement requirements. The existence of this standard means that we can save the smallest businesses from changes that might be inappropriate for this sector. Feedback indicates that small international companies consider FRS 105 to be a useful standard, and that an appetite exists for something similar within the international suite of standards.