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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

Intangible assets and goodwill under FRS 102

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01-03-2017

Technical helpsheet to help ICAEW members understand key aspects of accounting for intangible assets and goodwill under FRS 102.

Bloomsbury Core Accounting and Tax Service

Eligible firms have free access to Bloomsbury Professional's comprehensive online library, comprising more than 60 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 Core Accounting and Tax Service.

Impairment of Assets

A chapter on impairment of assets within the small companies' financial reporting framework and the micro-entities legislation, written by a specialist on small company reporting issues. FRS 102 Section 27 and the impairment of inventories, impairment of assets other than inventory and impairment of goodwill are discussed, along with helpful real-life examples.

Investments in joint ventures

A chapter on accounting for investments in joint ventures, in this title providing accountants and auditors with easy to follow guidance on the preparation of group accounts in line with UK GAAP. Topics include: Defined terms, Types of joint venture under UK GAAP, Transactions between a venturer and a joint venture, Group issues, Investors that do not have joint control, Disclosures.

Foreign currency issues

A chapter on foreign currency accounting issues, in this title providing accountants and auditors with easy to follow guidance on the preparation of group accounts in line with UK GAAP. Topics include: Functional currency, Reporting foreign currency transactions in the functional currency, Presentation currency, Intra-group balances and transactions, Goodwill on acquisition of a foreign operation.

Group accounts under UK GAAP

This title provides accountants and auditors with easy to follow and well structured guidance on the preparation of group accounts in line with UK GAAP. The commentary identifies the differences between IFRS and UK GAAP in the treatment of group accounts. The differences between accounts produced pre and post Brexit are also covered. All commentary is supported throughout by the inclusion of worked practical examples, based on the author's experience dealing with clients and running training courses.

Investments in associates

A chapter on accounting for investments in associates, in this title providing accountants and auditors with easy to follow guidance on the preparation of group accounts in line with UK GAAP. Topics include: Scope of FRS 102 and FRS 105, Group issues, Definition of an associate and significant influence, Measurement - Accounting Policy Election, Fair Value Models, Disclosure requirements.

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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 and checklists 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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Get an opinion from the experts. Our experienced technical advisors can help you with your UK GAAP questions and offer practical advice. Call the advisory helpline on +44 (0)1908 248 250.

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