FRS102 round up

We have put our recent FRS102 snippets of information together here for your convenience – we hope you find it helpful. Please feel free to contact us with any others you think of worthy of webspace!


Loans from director-shareholders

There is a really useful FAQ document that has been prepared in relation to ‘Loans from Director-Shareholders under the new UK GAAP’. The document sees the Financial Reporting Faculty staff comment on some of the questions and concerns raised by members about accounting for loans and directors who are also shareholders of the company.
This document is open to all and can be found HERE


Corporation tax overview 
This is a useful guide to help companies who are considering or have already implemented FRS102. It provides an overview of the key accounting changes from UK GAAP to FRS102.
Read it here


A really useful guide
As we come to the end of 2016 there have been some issues and themes emerging from the adoption of FRS102. There is an excellent guide that will help accountants and business owners understand the tax implications of FRS102 across the board. The index is comprehensive and shows the comparison between old GAAP and FRS102 and also transition from GAAP to FRS102 – it’s well worth a read or at least keeping to hand for reference…

Read it here.


HMRC view on implications

HMRC has produced a useful paper to assist companies who are thinking of choosing or have already chosen to apply FRS 102. In particular, it provides an overview of the key accounting changes and the key tax considerations that arise for those companies that transition from Old UK GAAP to FRS 102.

  • Part A of this paper provides a comparison of the accounting and tax differences that arise between Old UK GAAP and FRS 102
  • Part B of this paper provides a summary of the key accounting and tax considerations that arise on transition from Old UK GAAP to FRS 102

To view the paper, please follow this LINK


 Accounting for Directors’ Loans

What you need to know…

Directors’ loans that are repayable on demand will typically be measured at their nominal value, as under old UK GAAP, while any fixed term loans will typically be measured at amortised cost. Any fixed term loan with a below market value interest rate, or that is interest free, will therefore initially be recognised at a value less than the value of the loan itself. The ICAEW has recently issued a useful helpsheet on the subject. There is little change in respect of the disclosures required in respect of Directors Loans.

Read the full information HERE on the ICAEW site


FRS102 Early adopting – size DOES matter
A reminder about size thresholds
Don’t forget that the thresholds for companies to qualify as “small” have increased as follows:

  • Turnover: from £6.5m to £10.2m
  • Balance sheet total: from £3.26m to £5.1m
  • Number of employees: remains unchanged at 50

This change applies to accounting periods commencing on or after 1 January 2016. However, if the directors choose, it can be early adopted for accounting periods commencing on or after 1 January 2015. If the directors choose to early adopt these new regulations, they must also early adopt the new financial reporting framework – ie. they must use FRS 102 Section 1A as a minimum, and are not permitted to use FRSSE 2015. In addition the rest of SI2015/980 has to be adopted early – this means that abbreviated accounts can no longer be filed, although  there is a different filing exemption which means that only certain portions of the accounts need to be filed.

The ICAEW technical department have produced a useful summary of this for ICAEW members – available HERE. As before if the company qualified as “small” in the prior year, and met two out of three of the criterion under the previous limits for two of the last three years, it can be treated as small for the current year. You can also download a really useful ICAEW pdf guide HERE to help understand this and make sure you are using the right accounting framework.

Another useful article on this subject can be found at the Mercia website  Who still needs (or wants) an audit?