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Now is the time to get serious about FRS 102

Stephen Smith I have been reviewing the financial statements of an early adopter of FRS 102. This commercial organisation chose to publish its first set of FRS 102 financial statements for the year ended 31st December 2012. In doing this, it restated the UK GAAP financial statements for the year ended 31st December 2011 in accordance with FRS 102 for comparison purposes.

To help prepare this information, internally the company did restate the UK GAAP balance sheet as a FRS 102 statement of financial position at the transition date of 1st January 2011. However, it was not obliged to publish this, making it difficult for me to understand fully the impact of the conversion. In particular I could not establish what had caused the net differences between the values of particular assets and liabilities as stated in the UK GAAP balance sheet and restated in the FRS 102 statement of financial position as at 31st December 2011.

The seminar, Preparing for FRS 102 - the New UK GAAP, recommends a step by step process for completing the transition from UK GAAP to FRS 102.
For those organisations that have not chosen to be early adopters of FRS 102 and have a financial year end of 31st December then, in accordance with the timeline below, they should:

  1. have restated the UK GAAP balance sheet as at 1st January 2014; and
  2. be in a position to restate the financial statements for the year ended 31st December 2014.

It is very easy to underestimate the complexities of converting to FRS 102. Having said that, people should not fear this new financial reporting standard. The important first step is to make sure that you have taken all of the necessary actions at your transition date by restating your UK GAAP balance sheet in accordance with FRS 102.

My view is that it is a pity that the standard does not require you to publish a clear statement of all of the changes that were made to the UK GAAP balance sheet as at the transition date to convert it to a FRS 102 balance sheet. Without it the readers of your financial statements will not have a complete and accurate understanding of the impact of the changes.

Is your company an early adopter of FRS 102?

I would like to review the financial statements of other early adopters. Has your company already published a set of FRS 102 financial statements? Do you know of another company that has done so? If you can help me, please send an email to briefing@uktrainingworldwide.co.uk with the name of the company that is the early adopter.

Stephen Smith
Managing Director
UK Training (Worldwide) Limited

 

 

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