How to decide between FRSSE 2015 or FRS 102?

All Directors of small companies will soon have a decision to make in respect of which new accounting framework they intend to adopt in preparing the statutory accounts of the company.

On 31 July 2013 the Financial Reporting Council issued an updated version of the Financial Reporting Standard for Smaller Entities ‘FRSSE’ applicable in the UK and Republic of Ireland.

The amendments to the FRSSE are as a consequence of the revised reporting framework introduced into the UK and Republic of Ireland, with the issue of FRS 100 and FRS 102 the Financial Reporting Standard applicable in the UK and Republic of Ireland. As part of the revised reporting framework, the FRC has withdrawn extant financial reporting standards and Urgent Issues Task Force (UITF) abstracts and has made amendments to the FRSSE where it previously referred to standards or abstracts that are now withdrawn.

From January 2015

The FRSSE (effective January 2015) will supersede the FRSSE (effective April 2008) and will be effective for reporting periods beginning on or after 1 January 2015.

However the FRSSE 2015 will only be available for one year as it will become non-compliant with EU legislation from 1 January 2016 and so will be abolished. Accordingly for years commencing on or after 1 January 2016 it will be mandatory for small companies to adopt FRS 102 in their financial statements.

From July 2015

In July 2015 amendments to FRS 102 were published which require small companies to apply the recognition and measurement criteria of FRS 102 but with reduced presentation and disclosure requirements. The amendments are effective for accounting periods beginning on or after 1 January 2016 but with early adoption permitted for accounting periods commencing on or after 1 January 2015.

Result

This now makes it much more appealing for small companies to adopt FRS 102 from 1 January 2015 rather than moving to FRSSE 2015 for one year and then having to adopt FRS 102 the next year.

How we can help

If you want further information on the options available to your company or advice on how the new accounting frameworks will impact you then please contact your McCabe Ford Williams representative.