FRS 102 Section 1A Quick Guide
[et_pb_section admin_label=”section”][et_pb_row admin_label=”Row”][et_pb_column type=”2_3″][et_pb_text admin_label=”Text” background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid” custom_margin=”|0px||” custom_padding=”|0px||”] FRS 102 Section 1A For a large majority of accountants that had entities that met the thresholds of and therefore applied the FRSSE (Financial Reporting Standard for Smaller Entities) this will be the first year transitioning to FRS 102 as the FRSSE is […]
FRS 102 Summary – Section 1 – Scope
Section 1 deals with the scope of FRS 102 and the exemptions which can be claimed. FRS 102 is available for use by unlisted groups and listed or unlisted individual entities preparing financial statements that are intended to give a true and fair view.
FRS 102 Summary – Section 2 – Concepts and Pervasive Principles
Section 2 describes the objective of financial statements, which is to provide useful information about the entity’s financial position, performance and cash flows, and establishes the concepts and underlying principles of preparation.
FRS 102 Summary – Section 3 – Financial Statement Presentation
Section 3 explains that the financial statements of an entity shall give a true and fair view, what a complete set of financial statements is and what compliance with FRS 102 requires.
FRS 102 Summary – Section 4 – Statement of Financial Position
Section 4 deals with the presentation of the statement of financial position. The statement of financial position (also known as the balance sheet) presents an entity’s assets, liabilities and equity at the end of the reporting period.
FRS 102 Summary – Section 5 – Statement of Comprehensive Income and Income Statement Summary
Section 5 deals with the presentation of total comprehensive income for the reporting period. It allows presentation in one or two statements and sets out the information to be presented in those statements.
FRS 102 Summary – Section 6 – Statement of Changes in Equity and Statement of Income and Retained Earnings (SOCE)
Section 6 deals with the requirements for the presentation of changes in an entity’s equity for a period.
FRS 102 Summary – Section 7 – Statement of Cash Flows
Section 7 deals with the information that is to be presented in a statement of cash flow and identifies which entities may qualify for exemption from preparing cash flow statements.
FRS 102 Summary – Section 8 – Notes to the Financial Statements
Section 8 describes the principles underlying the information that is to be presented in the notes to the financial statements.
FRS 102 Summary – Section 9 – Consolidated and Separate Financial Statements
Section 9 deals with the requirement to present consolidated financial statements, the consolidation procedures to be performed, accounting for acquisitions and disposals in a group and the presentation of non-controlling interests.
FRS 102 Summary – Section 10 – Accounting Policies, Estimates and Errors
Section 10 deals with the selection and application of accounting policies used in preparing financial statements. It also details how changes in accounting policies and prior period adjustments should be accounted for.
FRS 102 Summary – Section 11 – Basic Financial Instruments
Section 11 defines basic financial instruments for all companies with the exception of public benefit entities.
FRS 102 Summary – Section 12 – Other Financial Instruments issues
Section 12 – Other Financial Instruments issues Summary Section 12 deals with more complex financial instruments and transactions which do not come within the scope of Section 11 and also have similar exceptions to Section 11 (as detailed in Section 11 of the guide) which are detailed in Section 12.3. In addition to Section 11 […]
FRS 102 Summary – Section 13 – Inventories
Section 13 deals with the recognition, measurement, costing, impairment of inventories and allocation of production overheads to inventory.
FRS 102 Summary – Section 14 – Investment in Associates
Section 14 – Investment in Associates Summary Section 14 defines what an associate is, how it should be recognised, measured, derecognised and disclosed. An associate is an entity over which the investor has significant influence and which is not a subsidiary or a joint venture (Section 14.2). Significant influence is the power to participate in […]
FRS 102 Summary – Section 15 – Investment in Joint Ventures
Section 15 deals with the recognition, measurement and disclosure for joint ventures.
FRS 102 Summary – Section 16 – Investment Property
Section 16 deals with the accounting for investment property. It only applies to investment property whose fair value can be measured reliably without undue cost or effort. If this is not the case then the property falls within the scope of section 17, property, plant and equipment. If it cannot be measured without undue cost then the depreciated cost model applies.
FRS 102 Summary – Section 17 – Property, Plant and Equipment
Section 17 deals with the initial recognition, subsequent measurement, depreciation and impairment for property, plant and equipment (PPE) held for use in the production, or supply of goods and services, for rental to others or administrative purposes. All items of PPE are expected to be used during more than one period.
FRS 102 Summary – Section 18 – Intangible Assets other than Goodwill
Section 18 deals the recognition, measurement, amortisation and disclosure for intangible assets other than goodwill.
FRS 102 Summary – Section 19 – Business Combinations and Goodwill
Section 19 deals with business combinations.
FRS 102 Summary – Section 20 – Leases
Section 20 applies to all leases, including some arrangements that do not take the legal form of a lease but convey rights to use assets in return for payments. It deals with the recognition, measurement and disclosures of operating and finance leases.
FRS 102 Summary – Section 21 – Provisions and Contingencies
Section 21 applies to all provisions, contingent liabilities and contingent assets, except those covered by other sections of FRS 102. For example, leases, construction contracts, employee benefits and income tax. It does not apply to executory contracts unless they are onerous contracts.
FRS 102 Summary – Section 22 – Liabilities and Equity
Section 22 addresses classification of financial instruments as a liability or equity and accounting for compound financial instruments. It applies to the accounting for equity instruments issued to owners of the entity and purchases of own equity.
FRS 102 Summary – Section 23 – Revenue
Section 23 applies to the accounting for revenue arising from the sale of goods, rendering of services, construction contracts and the use by others of entity assets yielding interest, royalties or dividends.
FRS 102 Summary – Section 24 – Government Grants
Section 24 deals with the recognition, measurement and disclosures for government grants. Government grants are assistance in the form of a transfer of resources to an entity in return for past or future compliance with specific conditions.
FRS 102 Summary – Section 25 – Borrowing Costs
Section 25 deals with the recognition and disclosures of borrowing costs. Borrowing costs are interest and other costs that an entity incurs in connection with the borrowing of funds. It covers interest expense using the effective interest method, finance charges in relation to finance leases and exchange differences arising from foreign currency borrowings.
FRS 102 Summary – Section 26 – Share based payments
Section 26 deals with the accounting for all share based payment transactions settled directly by the entity or another group entity on behalf of the entity including required disclosures.
FRS 102 Summary – Section 27 – Impairment of Assets
Section 27 deals with the measuring, recognising and disclosing impairments for all assets with the exception of assets arising from construction contracts covered by Section 23;
FRS 102 Summary – Section 28 – Employee Benefits
Section 28 deals with the recognition, measurement and disclosure of employees benefits to include the recognition and measurement of defined benefit and contribution pension schemes, short term employee benefits and termination benefits.
FRS 102 Summary – Section 29 – Income tax
Section 29 deals with the recognition, measurement and disclosure of current and deferred tax, VAT and withholding tax on dividends.
FRS 102 Summary – Section 30 – Foreign Currency Translation
Section 30 applies to foreign currency transactions and foreign operations in the financial statements of an entity. It also prescribes the translation of financial statements into a presentation currency.
FRS 102 Summary – Section 31 – Hyper-inflation
Section 31 applies to an entity whose functional currency is the currency of a hyper-inflation economy. It details with the adjustments required to exclude the effects of hyper-inflation.
FRS 102 Summary – Section 32 – Events after the End of the Reporting Period
Section 32 deals with the treatment of events after the balance sheet date and whether they are considered an adjusting or non-adjusting post balance sheet event.
FRS 102 Summary – Section 33 – Related Party Disclosures
Section 33 deals with disclosures required for all related party transactions and includes the definition of related parties.
FRS 102 Summary – Section 34 – Specialist Activities
Section 34 deals with the reporting requirements for entities applying FRS 102 in the specialist areas of agriculture, extractive activities, service concession arrangements, financial institutions, heritage assets, funding commitments and public benefit entities.
FRS 102 Summary – Section 35 – Transition to FRS 102
Section 35 deals with the exemptions available to first time adopters on transition to FRS 102 so as to make the transition easier on companies.