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FRS 102: Liabilities and equity under UK GAAP

FRS 102 Section 22 Liabilities and Equity sets out the requirements classifying financial instruments as either liabilities or equity, accounting for compound financial instruments, and accounting for non-controlling interests in consolidated financial statements.

The standard

The requirements regarding liabilities and equity 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

FRS 102 Debt for equity swaps


This factsheet explains how to account for ‘debt for equity swaps’ in accordance with FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland. Published 05 June 2018.

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.

Liabilities and Equity

A chapter on liabilities and equity within the small companies' financial reporting framework and the micro-entities legislation, written by a specialist on small company reporting issues. The scope of FRS 102, Section 22 and FRS 105 Section 17 are discussed, along with helpful real-life examples.

Liabilities and equity, provisions and contingencies

A full chapter on FRS 102, Section 21 'Provisions and Contingencies' and Section 22 'Liabilities and equity', in this accessible introduction to the accounting rules relevant to tax computations in the UK. Written for tax practitioners who wish to gain a better understanding of accounting rules in the UK.

Share-based Payment

A chapter on share-based payments - part of a one-stop-shop guide by Steve Collings on all aspects of UK auditing standards and new UK GAAP accounting standards. The chapter shows how to put the standards into practice, covering the scope of UK GAAP, recognition and measurement, modifications to terms and conditions, cash-settled share-based payment transactions, share-based payment transactions with cash alternatives, group plans, government-mandated plans, disclosure requirements and auditing share-based payment arrangements.

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Financial liabilities and equity

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 22 and IFRS, discusses contingent settlement provisions, recognition and measurement of issued equity instruments, and highlights provisions for other specific instruments and transactions.

Financial instruments

Fully updated guide focusing on each area of the financial statement in detail with illustrative examples. This chapter gives a comparison of FRS 102 Sections 11, 12, 22 and IFRS, and looks at recognition and measurement accounting policy choice, financial liabilities and equity, classification, initial recognition and measurement, subsequent measurement, derecognition, hedge accounting, presentation and disclosures.

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.

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 liabilities and equity 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 liabilities and equity covers the classification of instruments as liability or equity, accounting for the issue of equity instruments, convertible debt and other compound financial instruments, treasury shares, distribution to owners, and shares of a consolidated subsidiary.

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 financial liabilities and equity explains deals with the classification of an instrument as liability or equity, contingent settlement provisions, puttable instruments or instruments imposing an obligation only on liquidation, original issue of shares, equity arising from transactions with owners, capitalisation or bonus issue of shares, treasury shares, convertible debt, distribution to owners, distributable reserves.

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Ask ICAEW Technical Advisory Service

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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