The Financial Reporting Council has today issued FRS 102, the financial reporting standard applicable in the UK and Republic of Ireland, following several delays.

The standard was formally approved at a meeting of the FRC board on 5 March 2013, when the FRC announced the next day that it would be released “in the next couple of weeks”. It replaces the GAAP (Generally Accepted Accounting Practice), which was nearly 3,000 pages long, with a document of 350 pages.

Roger Marshall, FRC board member and chairman of its Accounting Council said the new standard will put the UK “at the leading edge of financial reporting”.

"FRS 102 modernises and simplifies financial reporting for unlisted companies and subsidiaries of listed companies as well as public benefit entities such as charities,” he said.

“The standard updates UK accounting to take account of evolving business practices,” he continued. “Developed with considerable consultation, FRS 102 brings a distinctly British flavour to the international standard for small and medium sized businesses."

FRS 102 completes a suite of accounting standards, following the publication of FRS 100 and 101 in November 2012. The standards will be effective from 1 January 2015, but may be adopted early for accounting periods ending on or after 31 December 2012.

Charity recognition 'pleasing'

CFG’s policy and public affairs officer Katherine Smithson praised the FRC’s recognition of charities in its announcement.

“We are very pleased that public benefit entities feature in FRS 102 as a group which has more bespoke needs in terms of financial reporting standards,” she said. “It’s also really good that the FRC is recognising the importance of these new standards to charities as well as business, up front.  This demonstrates that the importance of high quality financial reporting in the sector is gaining profile.”

Don Bawtree, head of not-for-profit at BDO, added that as FRS 102 has been published, development of the revised charity Sorp (Statement of Recommended Practice) “can now continue in earnest”, and pointed out that charities will need to wait for the revised Sorp to be agreed before they can apply the new rules.

“The effect of the new standard is likely to be pervasive, affecting how a set of accounts looks and how the numbers are put together,” he said. “For example, reserves could look very different in the future.”

Publication of FRS 102 was first intended for October 2012, before being changed to February and then suffering a further delay.