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Contents
3.2 Small company’s exemptions for certain sections in Section 3.
3.2.1 Extract from FRS 102: Section 3.1A.
3.3.1 Extract from FRS 102: Section 3.2.
3.4.1 Extract from FRS 102: Section 3.3-3.3A.
3.4.2.2 Example of FRS 102 Compliance Statement and Public Benefit entity Statement
3.5 Compliance with this FRS – True and fair override.
3.5.1 Extract from FRS 102: Section 3.4-3.6.
3.5.2.1 True and Fair override defined.
3.5.2.2 Expected instances where the true and fair override would be revoked.
3.5.2.3 The Disclosures required where a true and fair override is invoked.
3.5.2.3.1 The disclosure required in the following periods financial statements.
3.6.1 Extract from FRS 102: Section 3.8-3.9.
3.6.2.1 Overview and minimum look forward for going concern.
2.6.2.2 Material uncertainties relating to going concern.
3.6.2.3 Disclosure where financial statements prepared on a basis other than the going concern.
3.7.1 Extract from FRS 102: Section 3.10.
3.8 Consistency of presentation.
3.8.1 Extract from FRS 102: Section 3.11-3.13.
3.8.2.2 Disclosure period where there is a change.
3.9.1 Extract from FRS 102: Section 3.14.
3.10 Materiality and aggregation.
3.10.1 Extract from FRS 102: Section 3.15-3.16A.
3.10.2.1 Definition of Material.
3.11 Complete set of financial statements.
3.11.1 Extract from FRS 102: Section 3.17-3.22.
3.12 Identification of the financial statements.
3.12.1 Extract from FRS 102: Section 3.23-3.24.
3.12.2.1. Requirements throughout the Financial Statements.
3.12.2.2 Legal form and business activities requirement.
3.13 Presentation of information not required by this FRS.
3.13.1 Extract from FRS 102: Section 3.25.
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3.5 Compliance with this FRS – True and Fair Override
3.5.1 Extract from FRS 102: Section 3.4-3.6
3.4 In special circumstances when management concludes that compliance with any requirement of this FRS or applicable legislation (only when it allows for a true and fair override) is inconsistent with the requirement to give a true and fair view, the entity shall depart from that requirement in the manner set out in paragraph 3.5.
3.5 When an entity departs from a requirement of this FRS in accordance with paragraph 3.4, or from a requirement of applicable legislation, it shall disclose the following:
(a) that management has concluded that the financial statements give a true and fair view of the entity’s financial position, financial performance and, when required to be presented, cash flows;
(b) that it has complied with this FRS or applicable legislation, except that it has departed from a particular requirement of this FRS or applicable legislation to the extent necessary to give a true and fair view; and
(c) the nature and effect of the departure, including the treatment that this FRS or applicable legislation would require, the reason why that treatment would be so misleading in the circumstances that it would conflict with the objective of financial statements set out in Section 2, and the treatment adopted.
3.6 When an entity has departed from a requirement of this FRS or applicable legislation in a prior period, and that departure affects the amounts recognised in the financial statements for the current period, it shall make the disclosures set out in paragraph 3.5(c).
3.5.2 OmniPro comment
3.5.2.1 True and Fair override defined
A true and fair view override occurs where and an entity departs from the requirements of any Section within FRS 102 on the basis that Complying with same would not result in a true and fair view being shown. Section 3.4 of FRS 102 permits this true and fair override to be invoked.
3.5.2.2 Expected instances where the true and fair override would be revoked
The FRC have stated and Section 3.4 of FRS 102 makes it clear that the instances in which the true and fair override would be invoked should be very rare. Where this occurs the above guidance in Section 3.5 and 3.6 of FRS 102 should be followed.
3.5.2.3 The Disclosures required where a true and fair override is invoked
Section 3.5 and 3.6 of FRS 102 provides the disclosures to be included where a true and fair override is invoked These disclosures are required to state that the financial statements have been prepared in compliance with FRS 102 except to the extent of the departure. One should then disclose usually in the basis of preparation note:
- The nature and the effect of the departure (ie the impact of invoking a true and fair override when compared to FRS 102 requirements)
- The details of what FRS 102 required, and
- The actual treatment adopted, and
- The statements as to why the FRS 102 treatment would be so misleading
3.5.2.3.1 The disclosure required in the following periods financial statements.
The disclosure required in the following periods financial statements Section 3.6 of FRS 102 requires disclosure of how the departed in the prior period affected the amounts recognised in the financial statement of that year.
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Examples
Example 1: Statement of compliance with FRS 102.
Example 2: Statement of compliance with FRS 102 on adoption of FRS 102.
Example 3: Going concern disclosure.
Example 4: Basis of preparation – material uncertainty over going concern.
Example 5: Other than going concern disclosure.
Example 6: Frequency of reporting disclosure.
Example 8: Basis of Preparation Policy.
Example 9: Basis of Preparation Policy.
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