CFM20030 - Accounting for corporate finance: New UK GAAP
New UK GAAP has now replaced Old UK GAAP for all companies. The new accounting standards are:
Effective for periods beginning on or after 1 January 2015:
- FRS 100 (Application of financial reporting requirements) sets out the overall framework;
- FRS 101 (Reduced disclosure framework) sets out the reduced disclosure framework while importing the recognition and measurement principles of IFRS into UK GAAP (with some minor amendments);
- FRS 102 (The financial reporting standard applicable in the UK and the Republic of Ireland) sets out in detail the requirements that entities adopting that standard will need to follow;
- FRS 103 (Insurance Contracts) sets out in detail the accounting requirements for FRS 102 users for Insurance Contracts; and
- FRS 104 (Interim Financial Reporting) sets out in detail guidance on the preparation of interim reports by companies that apply FRS 102. It may also be used by entities adopting FRS 101.
- Effective for periods beginning on or after 1 January 2016:
- FRS 105 (The financial reporting standard applicable to the Micro-entities Regime) sets out in detail the requirements that those entities which meet the eligibility criteria of a micro entity may choose to apply.
Therefore, FRS 102 is the single New UK GAAP standard (excluding micro entities which choose to adopt FRS 105), which replaces existing UK standards and abstracts from 1 January 2015. FRS 102 is based on IFRS for SMEs, which is a simplified form of IFRS. As a result, FRS 102 is similar to IFRS in many areas. However, FRS 102 has been amended to comply with company law and to retain some accounting policies that were available under Old UK GAAP.
FRS 105 is based on FRS 102 but with adapted accounting requirements to satisfy the legal requirements applicable to micro entities and to reflect the simpler nature and smaller size of micro entities.
CFM20035 explains the position under Old UK GAAP.