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HMRC internal manual

Corporate Finance Manual

Accounting for corporate finance: Old UK GAAP excluding FRS 26 lenders: accounting standards

The following guidance covers Old UK GAAP (applied before 2015) where FRS 26 was not applied.

Overview of accounting guidance

There is no single accounting standard that lenders will follow when accounting for loans and other debt instruments.

The principal Accounting Standards which were likely to be relevant to determining the accounting for loan relationships were:

  • FRS 4 ‘Capital Instruments’
  • FRS 5 ‘Reporting the substance of transactions’
  • FRS 18 ‘Accounting policies’

With effect for accounting periods beginning on or after 1 January 2005, a number (but not all) of the requirements set out in FRS 4 were replaced by FRS 25 ‘Financial Instruments: Presentation’ (see CFM22030). However, these changes had limited impact on the lender.