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Contents

8.1 Scope.

8.2 Structure of the notes.

8.2.1 Extract from FRS102-Section 8.2–8.4.

8.2.2 OmniPro comment

8.3 Disclosure of accounting policies.

8.3.1 Extract from FRS102-Section 8.5.

8.3.2 OmniPro comment

8.3.2.1 Analysis.

8.3.2.2 Sample Accounting policies.

8.3.2.2.1 General information.

8.3.2.2.2 Basis of preparation.

8.3.2.2.3 Consolidation.

8.3.2.2.4 Basis of consolidation disclosures required where consolidated financial statements are prepared.

8.3.2.2.4.1 Basis of consolidation.

8.3.2.2.4.1.1 Subsidiary undertakings.

8.3.2.2.4.1.2 Associates and joint ventures.

8.3.2.2.4.1.3 Transactions eliminated on consolidation.

8.3.2.2.5 Business combinations and goodwill.

8.3.2.2.6 Goodwill.

8.3.2.2.7 Impairment.

8.3.2.2.8 Intangible assets.

8.3.2.2.9 Contingent acquisition consideration.

8.3.2.2.10 Financial assets.

8.3.2.2.11 General turnover accounting policy notes.

8.3.2.2.11.1 Turnover.

8.3.2.2.11.2 Turnover accounting policy for an insurance broker.

8.3.2.2.11.3 Turnover accounting policy for a manufacturing company that produces, install and also engage in long term contracts using the stage of completion using the contract activity.

8.3.2.2.11.4 Turnover accounting policy note where turnover is derived from investments. 

8.3.2.2.11.5 Turnover accounting policy for a software company. 

8.3.2.2.11.6 Turnover accounting policy for a construction company. 

8.3.2.2.11.7 Accounting policy where agreement exists for construction of real estate where recognised only when risk and reward transfer as opposed to using percentage completion. 

8.3.2.2.12 Government grants. 

8.3.2.2.12.1 Example using an accruals model.

8.3.2.2.12.2 Example using the performance model.

8.3.2.2.13 Dividend income. 

8.3.2.2.14 Dividend distribution. 

8.3.2.2.15 Currency. 

8.3.2.2.16 Financial instruments. 

8.3.2.2.16.1 (a) Trade and other debtors. 

8.3.2.2.16.2 (b) Cash and cash equivalents. 

8.3.2.2.16.3 (c) Other financial assets. 

8.3.2.2.16.4 (d) Trade and other creditors. 

8.3.2.2.16.5 (e) Borrowings. 

8.3.2.2.16.6 (f) Derivatives (no hedge accounting) 

8.3.2.2.16.7 Derivatives (where hedge accounting is applied) 

8.3.2.2.16.7.1 Hedge Accounting. 

8.3.2.2.16.7.1.1 Cash flow hedges. 

8.3.2.2.16.7.1.2 Fair value hedges. 

8.3.2.2.16.8 Derecognition. 

8.3.2.2.16.9 Offsetting financial instruments. 

8.3.2.2.17 Compound financial instruments. 

8.3.2.2.18 Provisions. 

8.3.2.2.18.1 Environmental liabilities. 

8.3.2.2.18.2 Closure costs. 

8.3.2.2.19 Contingencies. 

8.3.2.2.20 Employee Benefits. 

8.3.2.2.20.1 (a) Annual bonus plans. 

8.3.2.2.20.2 (b) Annual bonus plans. 

8.3.2.2.20.3 (c) Defined contribution pension plans. 

8.3.2.2.20.4 (d) Defined benefit pension. 

8.3.2.2.21 Preference share capital.

8.3.2.2.22 Share capital.

8.3.2.2.23 Related party transactions. 

8.3.2.2.24 Interest income. 

8.3.2.2.25 Taxation. 

8.3.2.2.26 Property, plant and equipment. 

8.3.2.2.27 Stocks. 

8.3.2.2.28 Investment properties. 

8.3.2.2.29 Leases.

8.3.2.2.30 Extract of a leasing company. 

8.3.2.2.31 Intangible assets. 

8.3.2.2.32 Goodwill.

8.3.2.2.33 Exceptional items. 

8.3.2.2.34 Share based costs. 

8.3.2.2.35 Investment properties. 

8.3.2.2.36 Biological assets –  forestry. 

8.3.2.2.37 Biological assets – Livestock (where a fair value model is adopted) 

8.3.2.2.38 Biological assets – Forestry (where cost model is adopted) 

8.3.2.2.39 Biological assets – Livestock (where cost model is adopted) 

8.4 Information about judgements. 

8.4.1 Extract from FRS102-Section 8.6. 

8.4.2 OmniPro comment 

8.5 Information about key sources of estimation uncertainty. 

8.5.1 Extract from FRS102-Section 8.7. 

8.5.2 OmniPro comment 

8.5.2.1 Analysis. 

8.5.2.2 Sample critical accounting judgements and estimates disclosures. 

8.5.2.2.1 Critical Accounting Judgements and Estimates. 

8.5.2.2.2 Establishing useful economic lives for depreciation purposes of property, plant and equipment.

8.5.2.2.3 Inventory provisioning. 

8.5.2.2.4 Providing for doubtful debts. 

8.5.2.2.5 Valuation of investment properties. 

8.5.2.2.6 Provisions. 

8.5.2.2.7 Defined benefit pension scheme. 

8.5.2.2.8 Impairments. 

8.5.2.2.9 Tax provisions and deferred tax assets. 

8.5.2.2.10 Contingent consideration. 

8.5.2.2.11 Business combinations. 

8.5.2.2.12 Establishing useful lives for amortisation of goodwill and intangible assets. 

8.5.2.2.13 Exceptional items. 

8.5.2.2.14 Rebates. 

8.5.2.2.15 Other areas. 

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8.4 Information About Judgements
8.4.1 Extract from FRS102-Section 8.6

8.6 An entity shall disclose, along with its significant accounting policies or other notes, the judgements, apart from those involving estimations (see paragraph 8.7), that management has made in the process of applying the entity’s accounting policies and that have the most significant effect on the amounts recognised in the financial statements.

8.4.2 OmniPro comment

Section 8.6 of FRS 102 effectively requires the entity to disclose judgements where they have been applied particularly in instances where the standard did not address them specifically and an accounting policy be adopted based on judgement.

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Examples

Example 1: Extract of examples of accounting policies note.

Example 2: Critical Accounting Judgements and Estimates

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