ICAEW.com works better with JavaScript enabled.

2018 UK GAAP accounts: are you ready?

With the annual financial reporting season nearly upon us, Marianne Mau of the Financial Reporting Faculty outlines some key considerations for annual accounts prepared in accordance with FRS 102.

Triennial review 2017 amendments

In December 2017 the FRC issued the Amendments to FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland – Triennial review 2017. These amendments are generally effective for accounting periods beginning on or after 1 January 2019 but for some, early adoption may be beneficial. The transitional requirements are that early application is permitted provided that all of the amendments (with some limited, but important, exceptions) are applied at the same time. 

Three areas where early adoption may be particularly attractive are considered further below. This is not an exhaustive list, as the significance of the amendments will depend on the facts and circumstances of the business. Care will need to be exercised to ensure that the transitional requirements are correctly applied.

Directors' loans

For small entities, loans from a director or from a director’s group of close family members may be measured at transaction price, provided that group contains at least one shareholder in the entity.  This simplification is wider than the interim relief issued in May 2017, after representations from ICAEW, which only permitted the simpler treatment if the director was a shareholder.

As an exception to the general transitional requirements, this amendment is available for early adoption separately from the other Triennial review 2017 amendments. The exemption, when adopted, is applied retrospectively.

Intangible assets acquired in business combinations

New criteria have been introduced for recognising intangible assets separately to goodwill.  This means fewer intangibles are required to be recognised separately.  However, recognition is permitted if it is felt to be providing useful information and provided it is done consistently for that class of intangible and for all business combinations. 

Any change in accounting policy arising from this aspect of the Triennial review 2017 amendments will be applied prospectively ie, any intangibles separately identified in earlier accounting periods are not subsumed within goodwill.

This amendment is available for early adoption only if all the Triennial review 2017 amendments are adopted at the same time.

Investment properties

The ‘undue cost or effort’ exemption has been removed, meaning investment properties must now be measured at fair value. However, for investment properties rented to other group entities, an accounting policy choice is introduced between measurement at cost or fair value.

This amendment is available for early adoption only if all the Triennial review 2017 amendments are adopted at the same time.

Other amendments

ICAEW has produced a wide range of resources to help you understand the implications of the Triennial Review 2017 amendments and point you in the direction of further guidance.

The Financial Reporting Faculty’s FAQs FRS 102 Triennial review 2017 amendments – What are the changes? provides a general overview of the changes. We also have two short podcasts, the first outlining key changes and the second dealing more specifically with the changes in respect of investment properties.


The UK government and the European Commission (EC) have published guidance to help citizens and businesses understand the potential implications of Brexit, including a BEIS Technical Notice on the corporate reporting implications of a ‘no-deal’ Brexit. ICAEW’s recent guide Government guidance on Brexit includes a summary of the notice on accountancy and audit.

The implications of Brexit for the year end accounts will depend on individual circumstances. The FRC has  provided UK companies with advice on how to improve the quality of their corporate reporting and has again highlighted the importance of the disclosure of key judgements and estimates. Much of the guidance is aimed at listed companies and IFRS reporters, but non-listed companies and UK GAAP reporters might also benefit from some of the hints and tips. Read our blog How to improve your annual report and accounts - FRC guidance on 2018 corporate reporting to help you navigate the reports.

You can find a range of resources on the ICAEW Brexit hub.

Marianne Mau, Financial Reporting Faculty.