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Date from which effective and transitional arrangements
Extract from FRS102: Section 1.14-1.15
1.14 An entity shall apply this FRS for accounting periods beginning on or after 1 January 2015. Early application is permitted for accounting periods ending on or after 31 December 2012. For entities that are within the scope of a SORP, early application is permitted for accounting periods ending on or after 31 December 2012 providing it does not conflict with the requirements of a current SORP or legal requirements for the preparation of financial statements. If an entity applies this FRS before 1 January 2015 it shall disclose that
1.15 In July 2015 amendments were made to this FRS to incorporate the new small entities regime and make other amendments necessary to maintain consistency with company law. An entity shall apply the amendments set out in Amendments to FRS 102 – Small entities and other minor amendments (the July 2015 amendments) other than the replacement of paragraph 26.15 with new paragraphs 26.15 to 26.15B for accounting periods beginning on or after 1 January 2016. Early application is:
- permitted for accounting periods beginning on or after 1 January 2015 provided that The Companies, Partnerships and Groups (Accounts and Reports) Regulations 2015 (SI 2015/980) are applied from the same date; and
- required if an entity applies The Companies, Partnerships and Groups (Accounts and Reports) Regulations 2015 (SI 2015/980) to a reporting period beginning before 1 January 2016.
For entities not subject to company law, early application is permitted from 1 January 2015.
If an entity applies the July 2015 amendments before 1 January 2016 it shall disclose that fact, unless it is a small entity, in which case it is encouraged to disclose that fact.
OmniPro comment
FRS 102 is effective for periods beginning on or after 1 January 2015 with early adoption permitted. Hence for an entity with a 31 December year end the first set of FRS 102 financial statements will have to be prepared for 31 December 2015 assuming the FRSSE cannot be applied. The FRSSE can be applied for all periods beginning before 1 January 2016. Therefore the opening balances under old GAAP at 1 January 2014 will have to be restated to FRS 102 compliant numbers and the 31 December 2014 comparatives adjusted so as to comply with FRS 102.
In relation to the amendments made in July 2015, these have not come into effect in the Republic of Ireland so as a result none of the amendments can be adopted as the EU Directive 2013/34 has not been enacted at this time. It is expected to be enacted in early 2017.
For UK entities early adoption of the July 2015 amendments can be made with early adoption permitted, but where early adoption has been applied it must be disclosed.
See example disclosure below for a qualifying entity claiming disclosure exemptions.
Example 1: Disclosure example for a qualifying entity applying reduced disclosure exemptions
‘FRS 102 sets out a reduced disclosure framework for a ‘qualifying entity’ as defined in FRS 102 which addresses the financial reporting requirements and disclosure exemptions in the financial statements of qualifying entities that otherwise apply the recognition, measurement and disclosure requirements of FRS 102.
The company is a qualifying entity for the purposes of FRS 102. Note X gives details of the company’s parent and from where its consolidated financial statements prepared in accordance with (insert GAAP) GAAP may be obtained. The company has notified its shareholders in writing about, and they do not object to, the use of disclosure exemptions availed of by the company in these financial statements.’
Example 2: Disclosure detailing application of July 2015 amendments
NOTE: THE BELOW IS ONLY APPLICABLE TO UK COMPANIES AT THIS TIME AS REPUBLIC OF IRELAND ENTITIES CANNOT ADOPT THESE AMENDMENTS AT THIS TIME AS THE EU DIRECTIVE 2013/34 HAS NOT BEEN ADOPTED IN IRELAND
‘The FRC issued amendments to FRS 102 called ‘Amendments to FRS 102-Small entities and other minor adjustments’ which can be applied for accounting periods beginning on or after 1 January 2016 with early adoption permitted. The company has adopted these amendments in these financial statements.’
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