[et_pb_section bb_built=”1″ admin_label=”Header – All Pages” transparent_background=”off” background_color=”#1e73be” allow_player_pause=”off” inner_shadow=”off” parallax=”off” parallax_method=”off” make_fullwidth=”off” use_custom_width=”off” width_unit=”on” make_equal=”off” use_custom_gutter=”off” custom_padding=”0px||0px|” next_background_color=”rgba(30,115,190,0.07)” custom_padding_tablet=”50px|0|50px|0″ custom_padding_last_edited=”on|desktop” global_module=”1221″][et_pb_row admin_label=”row” global_parent=”1221″ make_fullwidth=”off” use_custom_width=”off” width_unit=”on” use_custom_gutter=”off” custom_padding=”||5px|” allow_player_pause=”off” parallax=”off” parallax_method=”on” make_equal=”off” parallax_1=”off” parallax_method_1=”off” background_position=”top_left” background_repeat=”repeat” background_size=”initial”][et_pb_column type=”4_4″][et_pb_post_title global_parent=”1221″ title=”on” meta=”off” author=”on” date=”on” categories=”on” comments=”on” featured_image=”off” featured_placement=”below” parallax_effect=”on” parallax_method=”off” text_orientation=”left” text_color=”light” text_background=”off” text_bg_color=”rgba(255,255,255,0.9)” module_bg_color=”rgba(255,255,255,0)” use_border_color=”off” border_color=”#ffffff” border_style=”solid” custom_padding=”10px|||” parallax=”on” background_color=”rgba(255,255,255,0)” /][/et_pb_column][/et_pb_row][/et_pb_section][et_pb_section bb_built=”1″ fullwidth=”off” specialty=”off” transparent_background=”off” background_color=”rgba(30,115,190,0.07)” allow_player_pause=”off” inner_shadow=”off” parallax=”off” parallax_method=”on” custom_padding=”40px||40px|” make_fullwidth=”off” use_custom_width=”off” width_unit=”on” make_equal=”off” use_custom_gutter=”off” prev_background_color=”#1e73be” next_background_color=”#000000″][et_pb_row make_fullwidth=”off” use_custom_width=”off” width_unit=”on” use_custom_gutter=”off” custom_padding=”0px||0px|” allow_player_pause=”off” parallax=”off” parallax_method=”on” make_equal=”off” parallax_1=”off” parallax_method_1=”off” background_position=”top_left” background_repeat=”repeat” background_size=”initial”][et_pb_column type=”4_4″][et_pb_text background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid” background_position=”top_left” background_repeat=”repeat” background_size=”initial”]
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[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section][et_pb_section bb_built=”1″ fullwidth=”off” specialty=”off” transparent_background=”off” background_color=”rgba(30,115,190,0.07)” allow_player_pause=”off” inner_shadow=”off” parallax=”off” parallax_method=”on” make_fullwidth=”off” use_custom_width=”off” width_unit=”on” make_equal=”off” use_custom_gutter=”off” custom_padding=”0px|||” prev_background_color=”#000000″][et_pb_row background_position=”top_left” background_repeat=”repeat” background_size=”initial”][et_pb_column type=”4_4″][et_pb_text background_layout=”light” text_orientation=”center” use_border_color=”off” border_color=”#ffffff” border_style=”solid” custom_padding=”0px|||” background_position=”top_left” background_repeat=”repeat” background_size=”initial” module_alignment=”center”]
FRS 102 – Section-by-Section Analysis
[/et_pb_text][/et_pb_column][/et_pb_row][et_pb_row make_fullwidth=”off” use_custom_width=”off” width_unit=”on” use_custom_gutter=”off” custom_padding=”||60px|” allow_player_pause=”off” parallax=”off” parallax_method=”on” make_equal=”off” parallax_1=”off” parallax_method_1=”off” background_position=”top_left” background_repeat=”repeat” background_size=”initial”][et_pb_column type=”4_4″][et_pb_toggle admin_label=”Section 1 – Scope” saved_tabs=”all” title=”Section 1 – Scope” open=”off” title_font_size=”16″ use_border_color=”off” border_color=”#ffffff” border_style=”solid” module_class=”custom-toggle-2 blue-heading” background_position=”top_left” background_repeat=”repeat” background_size=”initial”]
Section 1 deals with the scope of FRS 102 and the exemptions which can be claimed.
[/et_pb_toggle][et_pb_toggle admin_label=”Section 2 – Concepts and Pervasive Principles” saved_tabs=”all” title=”Section 2 – Concepts and Pervasive Principles” open=”off” title_font_size=”16″ use_border_color=”off” border_color=”#ffffff” border_style=”solid” module_class=”custom-toggle-2 blue-heading” background_position=”top_left” background_repeat=”repeat” background_size=”initial”]
Section 2 describes the objective of financial statements, which is to provide useful information about the entity’s financial position, performance and cash flows, and establishes the concepts and underlying principles of preparation.
[/et_pb_toggle][et_pb_toggle admin_label=”Section 3 – Financial Statement Presentation” saved_tabs=”all” title=”Section 3 – Financial Statement Presentation” open=”off” title_font_size=”16″ use_border_color=”off” border_color=”#ffffff” border_style=”solid” module_class=”custom-toggle-2 blue-heading” background_position=”top_left” background_repeat=”repeat” background_size=”initial”]
Section 3 explains that the financial statements of an entity shall give a true and fair view, what a complete set of financial statements is; and what compliance with FRS 102 requires.
[/et_pb_toggle][et_pb_toggle admin_label=”Section 4 – Statement of Financial Position” saved_tabs=”all” title=”Section 4 – Statement of Financial Position” open=”off” title_font_size=”16″ use_border_color=”off” module_class=”custom-toggle-2 blue-heading” background_position=”top_left” background_repeat=”repeat” background_size=”initial” _builder_version=”3.0.106″]
Section 4 deals with the presentation of the statement of financial position. The statement of financial position (also known as the balance sheet) presents an entity’s assets, liabilities and equity at the end of the reporting period.
[/et_pb_toggle][et_pb_toggle admin_label=”Section 5 – Statement of Comprehensive Income and Income Statement” saved_tabs=”all” title=”Section 5 – Statement of Comprehensive Income and Income Statement” open=”off” title_font_size=”16″ use_border_color=”off” border_color=”#ffffff” border_style=”solid” module_class=”custom-toggle-2 blue-heading” background_position=”top_left” background_repeat=”repeat” background_size=”initial”]
Section 5 deals with the presentation of total comprehensive income for the reporting period. It allows presentation in one or two statements and sets out the information to be presented in those statements.
[/et_pb_toggle][et_pb_toggle admin_label=”Section 6 – (SOCE)” saved_tabs=”all” title=”Section 6 – (SOCE)” open=”off” title_font_size=”16″ use_border_color=”off” border_color=”#ffffff” border_style=”solid” module_class=”custom-toggle-2 blue-heading” background_position=”top_left” background_repeat=”repeat” background_size=”initial”]
Section 6 deals with the requirements for the presentation of changes in an entity’s equity for a period.
[/et_pb_toggle][et_pb_toggle admin_label=”Section 7 – Statement of Cash Flows” saved_tabs=”all” title=”Section 7 – Statement of Cash Flows” open=”off” title_font_size=”16″ use_border_color=”off” border_color=”#ffffff” border_style=”solid” module_class=”custom-toggle-2 blue-heading” background_position=”top_left” background_repeat=”repeat” background_size=”initial”]
Section 7 deals with the information that is to be presented in a statement of cash flow and identifies which entities may qualify for exemption from preparing cash flow statements.
[/et_pb_toggle][et_pb_toggle admin_label=”Section 8 – Notes to the Financial Statements” saved_tabs=”all” title=”Section 8 – Notes to the Financial Statements” open=”off” title_font_size=”16″ use_border_color=”off” border_color=”#ffffff” border_style=”solid” module_class=”custom-toggle-2 blue-heading” background_position=”top_left” background_repeat=”repeat” background_size=”initial”]
Section 8 describes the principles underlying the information that is to be presented in the notes to the financial statements.
[/et_pb_toggle][et_pb_toggle admin_label=”Section 9 – Consolidated and Separate Financial Statements” saved_tabs=”all” title=”Section 9 – Consolidated and Separate Financial Statements” open=”off” title_font_size=”16″ use_border_color=”off” border_color=”#ffffff” border_style=”solid” module_class=”custom-toggle-2 blue-heading” background_position=”top_left” background_repeat=”repeat” background_size=”initial”]
Section 9 deals with the requirement to present consolidated financial statements, the consolidation procedures to be performed, accounting for acquisitions and disposals in a group and the presentation of non-controlling interests.
[/et_pb_toggle][et_pb_toggle admin_label=”Section 10 – Accounting Policies, Estimates and Errors” saved_tabs=”all” title=”Section 10 – Accounting Policies, Estimates and Errors” open=”off” title_font_size=”16″ use_border_color=”off” border_color=”#ffffff” border_style=”solid” module_class=”custom-toggle-2 blue-heading” background_position=”top_left” background_repeat=”repeat” background_size=”initial”]
Section 10 deals with the selection and application of accounting policies used in preparing financial statements. It also details how changes in accounting policies and prior period adjustments should be accounted for.
[/et_pb_toggle][et_pb_toggle admin_label=”Section 11 – Basic Financial Instruments” saved_tabs=”all” title=”Section 11 – Basic Financial Instruments” open=”off” title_font_size=”16″ use_border_color=”off” border_color=”#ffffff” border_style=”solid” module_class=”custom-toggle-2 blue-heading” background_position=”top_left” background_repeat=”repeat” background_size=”initial”]
Section 11 defines basic financial instruments for all companies with the exception of public benefit entities.
[/et_pb_toggle][et_pb_toggle admin_label=”Section 12 – Other Financial Instruments Issues” saved_tabs=”all” title=”Section 12 – Other Financial Instruments Issues” open=”off” title_font_size=”16″ use_border_color=”off” border_color=”#ffffff” border_style=”solid” module_class=”custom-toggle-2 blue-heading” background_position=”top_left” background_repeat=”repeat” background_size=”initial”]
Section 12 deals with more complex financial instruments and transactions which do not come within the scope of Section 11 and also have similar exceptions to Section 11 (as detailed in Section 11 of this guide) which are detailed in Section 12.3.
[/et_pb_toggle][et_pb_toggle admin_label=”Section 13 – Inventories” saved_tabs=”all” title=”Section 13 – Inventories” open=”off” title_font_size=”16″ use_border_color=”off” border_color=”#ffffff” border_style=”solid” module_class=”custom-toggle-2 blue-heading” background_position=”top_left” background_repeat=”repeat” background_size=”initial”]
Section 13 deals with the recognition, measurement, costing, impairment of inventories and allocation of production overheads to inventory.
[/et_pb_toggle][et_pb_toggle admin_label=”Section 14 – Investment in Associates” saved_tabs=”all” title=”Section 14 – Investment in Associates” open=”off” title_font_size=”16″ use_border_color=”off” border_color=”#ffffff” border_style=”solid” module_class=”custom-toggle-2 blue-heading” background_position=”top_left” background_repeat=”repeat” background_size=”initial”]
Section 14 defines what an associate is, how it should be recognised, measured, derecognised and disclosed.
[/et_pb_toggle][et_pb_toggle admin_label=”Section 15 – Investment in Joint Ventures” saved_tabs=”all” title=”Section 15 – Investment in Joint Ventures” open=”off” title_font_size=”16″ use_border_color=”off” border_color=”#ffffff” border_style=”solid” module_class=”custom-toggle-2 blue-heading” background_position=”top_left” background_repeat=”repeat” background_size=”initial”]
Section 15 deals with the recognition, measurement and disclosure for joint ventures.
[/et_pb_toggle][et_pb_toggle admin_label=”Section 16 – Investment Property” saved_tabs=”all” title=”Section 16 – Investment Property” open=”off” title_font_size=”16″ use_border_color=”off” border_color=”#ffffff” border_style=”solid” module_class=”custom-toggle-2 blue-heading” background_position=”top_left” background_repeat=”repeat” background_size=”initial”]
Section 16 deals with the accounting for investment property. It only applies to investment property whose fair value can be measured reliably without undue cost or effort. If this is not the case then the property falls within the scope of section 17, property, plant and equipment. If it cannot be measured without undue cost then the depreciated cost model applies.
[/et_pb_toggle][et_pb_toggle admin_label=”Section 17 – Property, Plant and Equipment” saved_tabs=”all” title=”Section 17 – Property, Plant and Equipment” open=”off” title_font_size=”16″ use_border_color=”off” border_color=”#ffffff” border_style=”solid” module_class=”custom-toggle-2 blue-heading” background_position=”top_left” background_repeat=”repeat” background_size=”initial”]
Section 17 deals with the initial recognition, subsequent measurement, depreciation and impairment for property, plant and equipment (PPE) held for use in the production, or supply of goods and services, for rental to others or administrative purposes. All items of PPE are expected to be used during more than one period.
[/et_pb_toggle][et_pb_toggle admin_label=”Section 18 – Intangible Assets other than Goodwill” saved_tabs=”all” title=”Section 18 – Intangible Assets other than Goodwill” open=”off” title_font_size=”16″ use_border_color=”off” border_color=”#ffffff” border_style=”solid” module_class=”custom-toggle-2 blue-heading” background_position=”top_left” background_repeat=”repeat” background_size=”initial”]
Section 18 deals the recognition, measurement, amortisation and disclosure for intangible assets other than goodwill. Section 18.2 defines an intangible asset as an identifiable non- monetary asset without physical substance. To count as identifiable, it must be separable, and must arise from contractual or other legal rights.
[/et_pb_toggle][et_pb_toggle admin_label=”Section 19 – Business Combinations and Goodwill” saved_tabs=”all” title=”Section 19 – Business Combinations and Goodwill” open=”off” title_font_size=”16″ use_border_color=”off” border_color=”#ffffff” border_style=”solid” module_class=”custom-toggle-2 blue-heading” background_position=”top_left” background_repeat=”repeat” background_size=”initial”]
Section 19 deals with business combinations. A business combination is the bringing together of separate entities or businesses into one reporting entity (Section 19.3). All business combinations (other than those that meet the definition of a group reconstruction, and public benefit entities) are accounted using the purchase method of accounting.
[/et_pb_toggle][et_pb_toggle admin_label=”Section 20 – Leases” saved_tabs=”all” title=”Section 20 – Leases” open=”off” title_font_size=”16″ use_border_color=”off” border_color=”#ffffff” border_style=”solid” module_class=”custom-toggle-2 blue-heading” background_position=”top_left” background_repeat=”repeat” background_size=”initial”]
Section 20 applies to all leases, including some arrangements that do not take the legal form of a lease but convey rights to use assets in return for payments. It deals with the recognition, measurement and disclosures of operating and finance leases.
[/et_pb_toggle][et_pb_toggle admin_label=”Section 21 – Provisions and Contingencies” saved_tabs=”all” title=”Section 21 – Provisions and Contingencies” open=”off” title_font_size=”16″ use_border_color=”off” border_color=”#ffffff” border_style=”solid” module_class=”custom-toggle-2 blue-heading” background_position=”top_left” background_repeat=”repeat” background_size=”initial”]
Section 21 applies to all provisions, contingent liabilities and contingent assets, except those covered by other sections of FRS 102. For example, leases, construction contracts, employee benefits and income tax. It does not apply to executory contracts unless they are onerous contracts.
[/et_pb_toggle][et_pb_toggle admin_label=”Section 22 – Financial Liabilities and Equity” saved_tabs=”all” title=”Section 22 – Financial Liabilities and Equity” open=”off” title_font_size=”16″ use_border_color=”off” border_color=”#ffffff” border_style=”solid” module_class=”custom-toggle-2 blue-heading” background_position=”top_left” background_repeat=”repeat” background_size=”initial”]
Section 22 addresses classification of financial instruments as a liability or equity and accounting for compound financial instruments. It applies to the accounting for equity instruments issued to owners of the entity and purchases of own equity.
[/et_pb_toggle][et_pb_toggle admin_label=”Section 23 – Revenue” saved_tabs=”all” title=”Section 23 – Revenue” open=”off” title_font_size=”16″ use_border_color=”off” border_color=”#ffffff” border_style=”solid” module_class=”custom-toggle-2 blue-heading” background_position=”top_left” background_repeat=”repeat” background_size=”initial”]
Section 23 applies to the accounting for revenue arising from the sale of goods, rendering of services, construction contracts and the use by others of entity assets yielding interest, royalties or dividends. It does not apply to revenue or income arising from transactions and events dealt with in other sections of the standard (e.g. leases, changes in fair value in investment property).
[/et_pb_toggle][et_pb_toggle admin_label=”Section 24 – Government Grants” saved_tabs=”all” title=”Section 24 – Government Grants” open=”off” title_font_size=”16″ use_border_color=”off” border_color=”#ffffff” border_style=”solid” module_class=”custom-toggle-2 blue-heading” background_position=”top_left” background_repeat=”repeat” background_size=”initial”]
Section 24 deals with the recognition, measurement and disclosures for government grants. Government grants are assistance in the form of a transfer of resources to an entity in return for past or future compliance with specific conditions. It excludes transactions with governments that cannot be distinguished from the normal trading transactions of the entity.
[/et_pb_toggle][et_pb_toggle admin_label=”Section 25 – Borrowing Costs” saved_tabs=”all” title=”Section 25 – Borrowing Costs” open=”off” title_font_size=”16″ use_border_color=”off” border_color=”#ffffff” border_style=”solid” module_class=”custom-toggle-2 blue-heading” background_position=”top_left” background_repeat=”repeat” background_size=”initial”]
Section 25 deals with the recognition and disclosures of borrowing costs. Borrowing costs are interest and other costs that an entity incurs in connection with the borrowing of funds. It covers interest expense using the effective interest method, finance charges in relation to finance leases and exchange differences arising from foreign currency borrowings.
[/et_pb_toggle][et_pb_toggle admin_label=”Section 26 – Share Based Payments” saved_tabs=”all” title=”Section 26 – Share Based Payments” open=”off” title_font_size=”16″ use_border_color=”off” border_color=”#ffffff” border_style=”solid” module_class=”custom-toggle-2 blue-heading” background_position=”top_left” background_repeat=”repeat” background_size=”initial”]
Section 26 deals with the accounting for all share based payment transactions settled directly by the entity or another group entity on behalf of the entity including required disclosures.
[/et_pb_toggle][et_pb_toggle admin_label=”Section 27 – Impairment of Assets” saved_tabs=”all” title=”Section 27 – Impairment of Assets” open=”off” title_font_size=”16″ use_border_color=”off” border_color=”#ffffff” border_style=”solid” module_class=”custom-toggle-2 blue-heading” background_position=”top_left” background_repeat=”repeat” background_size=”initial”]
Section 27 deals with the measuring, recognising and disclosing impairments for the assets.
[/et_pb_toggle][et_pb_toggle admin_label=”Section 28 – Employee Benefits” saved_tabs=”all” title=”Section 28 – Employee Benefits” open=”off” title_font_size=”16″ use_border_color=”off” border_color=”#ffffff” border_style=”solid” module_class=”custom-toggle-2 blue-heading” background_position=”top_left” background_repeat=”repeat” background_size=”initial”]
Section 28 deals with the recognition, measurement and disclosure of employees benefits to include the recognition and measurement of defined benefit and contribution pension schemes, short term employee benefits and termination benefits.
[/et_pb_toggle][et_pb_toggle admin_label=”Section 29 – Income Tax” saved_tabs=”all” title=”Section 29 – Income Tax” open=”off” title_font_size=”16″ use_border_color=”off” border_color=”#ffffff” border_style=”solid” module_class=”custom-toggle-2 blue-heading” background_position=”top_left” background_repeat=”repeat” background_size=”initial”]
Section 29 deals with the recognition, measurement and disclosure of current and deferred tax, VAT and withholding tax on dividends.
[/et_pb_toggle][et_pb_toggle admin_label=”Section 30 – Foreign Currency Translation” saved_tabs=”all” title=”Section 30 – Foreign Currency Translation” open=”off” title_font_size=”16″ use_border_color=”off” border_color=”#ffffff” border_style=”solid” module_class=”custom-toggle-2 blue-heading” background_position=”top_left” background_repeat=”repeat” background_size=”initial”]
This section applies to foreign currency transactions and foreign operations in the financial statements of an entity. It also prescribes the translation of financial statements into a presentation currency.
[/et_pb_toggle][et_pb_toggle admin_label=”Section 31 – Hyperinflation” saved_tabs=”all” title=”Section 31 – Hyperinflation” open=”off” title_font_size=”16″ use_border_color=”off” border_color=”#ffffff” border_style=”solid” module_class=”custom-toggle-2 blue-heading” background_position=”top_left” background_repeat=”repeat” background_size=”initial”]
This section applies to an entity whose functional currency is the currency of a hyperinflation economy. It details with the adjustments required to exclude the effects of hyperinflation.
[/et_pb_toggle][et_pb_toggle admin_label=”Section 32 – Events After the End of the Reporting Period” saved_tabs=”all” title=”Section 32 – Events After the End of the Reporting Period” open=”off” title_font_size=”16″ use_border_color=”off” border_color=”#ffffff” border_style=”solid” module_class=”custom-toggle-2 blue-heading” background_position=”top_left” background_repeat=”repeat” background_size=”initial”]
Section 32 deals with the treatment of events after the balance sheet date and whether they are considered an adjusting or non-adjusting post balance sheet event.
[/et_pb_toggle][et_pb_toggle admin_label=”Section 33 – Related Party Disclosures” saved_tabs=”all” title=”Section 33 – Related Party Disclosures” open=”off” title_font_size=”16″ use_border_color=”off” border_color=”#ffffff” border_style=”solid” module_class=”custom-toggle-2 blue-heading” background_position=”top_left” background_repeat=”repeat” background_size=”initial”]
Section 33 deals with disclosures required for all related party transactions and includes the definition of related parties.
[/et_pb_toggle][et_pb_toggle admin_label=”Section 34 – Specialist Activities” saved_tabs=”all” title=”Section 34 – Specialist Activities” open=”off” title_font_size=”16″ use_border_color=”off” border_color=”#ffffff” border_style=”solid” module_class=”custom-toggle-2 blue-heading” background_position=”top_left” background_repeat=”repeat” background_size=”initial”]
Section 34 deals with the reporting requirements for entities applying FRS 102 in the specialist areas of agriculture, extractive activities, service concession arrangements, financial institutions, heritage assets, funding commitments and public benefit entities.
[/et_pb_toggle][et_pb_toggle admin_label=”Section 35 – Transition to FRS 102″ saved_tabs=”all” title=”Section 35 – Transition to FRS 102″ open=”off” title_font_size=”16″ use_border_color=”off” border_color=”#ffffff” border_style=”solid” module_class=”custom-toggle-2 blue-heading” background_position=”top_left” background_repeat=”repeat” background_size=”initial”]
Section 35 deals with the exemptions available to first time adopters on transition to FRS 102 so as to make the transition easier on companies.
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