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[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section][et_pb_section admin_label=”Section” fullwidth=”off” specialty=”off”][et_pb_row admin_label=”Row”][et_pb_column type=”1_2″][et_pb_text admin_label=”Text” background_layout=”light” text_orientation=”center” text_font_size=”14″ use_border_color=”off” border_color=”#ffffff” border_style=”solid”] [button link=”http://www.frs102.com/members/premium-toolkit/” type=”big” color=”red”] Return to Main Index[/button] [/et_pb_text][/et_pb_column][et_pb_column type=”1_2″][et_pb_text admin_label=”Text” background_layout=”light” text_orientation=”center” text_font_size=”14″ use_border_color=”off” border_color=”#ffffff” border_style=”solid”] [button link=”https://uk.frs102.com/members/premium-toolkit/section-1/” type=”big” color=”red”] Return to Section 1 Home[/button] [/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section][et_pb_section admin_label=”Section” fullwidth=”off” specialty=”off” transparent_background=”off” allow_player_pause=”off” inner_shadow=”off” parallax=”off” parallax_method=”off” padding_mobile=”off” make_fullwidth=”off” use_custom_width=”off” width_unit=”on” make_equal=”off” use_custom_gutter=”off” gutter_width=”3″][et_pb_row admin_label=”Row”][et_pb_column type=”4_4″][et_pb_text admin_label=”Main Body Text” background_layout=”light” text_orientation=”justified” use_border_color=”off” border_color=”#ffffff” border_style=”solid”]Section 1: Scope of Financial Reporting Standard 102
Scope
Section 1 provides details on the applicability of FRS 102 and the disclosure exemptions available to qualifying companies and small companies. Section 1A deals specifically with small companies. It also provides the date from which FRS 102 becomes effective.
Extract from FRS102: Section 1.1-1.2A
1.1 This FRS applies to financial statements that are intended to give a true and fair view of a reporting entity’s financial position and profit or loss (or income and expenditure) for a period.
1.2 The requirements of this FRS are applicable to public benefit entities and other entities, not just to companies. However, those paragraph numbers prefixed with ‘PBE’ shall only be applied by public benefit entities, and shall not be applied directly, or by analogy, by entities that are not public benefit entities, other than, where specifically directed, entities within a public benefit entity group.
1.2A An entity applying this FRS must ensure it complies with any relevant legal requirements applicable to it. This FRS does not necessarily contain all legal disclosure requirements. In relation to small companies (see Section 1A Small Entities) most legal disclosure requirements are included, but, for example, those only relevant when the financial statements have been audited are not included.
OmniPro comment
FRS 102 has a very wide scope and applies to all forms of entities/business and is not restricted to companies. The standard does not cover all statutory disclosure requirements (other than those required for small companies which is provided in Section 1A.
Basis of preparation of financial statements
Extract from FRS102: Section 1.3-1.7
1.3 As stated in FRS 100, an entity that is required by the IAS Regulation (or other legislation or regulation) to prepare consolidated financial statements in accordance with EU-adopted IFRS must do so. The individual financial statements of such an entity, or the individual financial statements or consolidated financial statements of any other entity within the scope of FRS 100, must be prepared in accordance with the following requirements:
(a) If the financial statements are the individual financial statements of an entity that is eligible to apply FRS 105, they may be prepared in accordance with that standard.
(b) If the financial statements are those of an entity that is not eligible to apply FRS 105, or of an entity that is eligible to apply FRS 105 but chooses not to do so, they must be prepared in accordance with this FRS, EU-adopted IFRS or FRS 101
1.4 An entity whose ordinary shares or potential ordinary shares are publicly traded, or that files, or is in the process of filing, its financial statements with a securities commission or other regulatory organisation for the purpose of issuing ordinary shares in a public market, or an entity that chooses to disclose earnings per share, shall apply IAS 33 Earnings per Share (as adopted in the EU).
1.5 An entity whose debt or equity instruments are publicly traded, or that files, or is in the process of filing, its financial statements with a securities commission or other regulatory organisation for the purpose of issuing any class of instruments in a public market, or an entity that chooses to provide information described as segment information, shall apply IFRS 8 Operating Segments (as adopted in the EU). If an entity discloses disaggregated information, but the information does not comply with the requirements of IFRS 8, it shall not describe the information as segment information.
1.6 An entity shall apply FRS 103 Insurance Contracts to:
(a) insurance contracts (including reinsurance contracts) that it issues and reinsurance contracts that it holds; and
(b) financial instruments with a discretionary participation feature that it issues.
1.7 When applying IAS 33, IFRS 8 and IFRS 6 Exploration for and Evaluation of Mineral Resources (see paragraph 34.11), references made to other IFRSs within those standards shall be taken to be references to the relevant section or paragraph in this FRS.
OmniPro comment
Entities have a choice to either:
- Apply FRS 102
- Where the size criteria are met entities may apply FRS 102-Section 1A ‘Small entities’. (This cannot be chosen by Republic of Ireland companies at this time as the EU Directive 2013/34 has not been enacted). Section 1A has been discussed further in Section 1A of this manual. The thresholds for small entities in the UK are as follows:
Entities must meet two of the three below threshold’s:
Turnover-not more than £10.2 million
Balance sheet total – not more than £5.1 million
Average number of employees- not more than 50
(NOTE: These thresholds take effect from 1 January 2016 however early adoption is possible under FRS 102)
- Where the size criteria are met entities may apply FRS 105-Micro Entities (cannot be chosen by Republic of Ireland companies at this time as the EU Directive 2013/34 has not been enacted). The threshold for micro entities in the UK are as follows:
Entities must meet two of the three below threshold’s:
Turnover-not more than £632,000
Balance sheet total – not more than £316,000
Average number of employees – not more than 10
(note these thresholds take effect from 1 January 2016 however early adoption is possible under FRS 102)
- Apply EU adopted IFRS
- Apply FRS 101 (IFRS with reduced disclosures)
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