CFM23090 - New UK GAAP: FRS 102: transition

For those entities applying FRS 102 with an accounting period beginning on or after 1 January 2015.

First-time adoption of New UK GAAP

FRS 101 and FRS 102 effective date was for accounting periods beginning on or after 1 January 2015 although early adoption was permitted subject to meeting the relevant criteria set out in each standard.

An entity applying either FRS 101 or FRS 102 for the first time should recognise all financial assets and liabilities that qualify for recognition, and which have not yet qualified for derecognition. However assets previously recognised and then derecognised under previous GAAP need not be recognised on adopting FRS 101 or FRS 102.

FRS 101 and FRS 102, subject to certain exceptions, require that their recognition and measurement criteria are applied retrospectively, with the opening balance of retained earnings for the earliest presented (for example, with effect from 1 January 2014 for 1 January 2015 first time adopters) and all other comparative amounts adjusted as if the standard had always been in use.

The transitional provisions for both FRS 101 and FRS 102 must be considered carefully. There are detailed provisions relating to the transition to adopting FRS 101 or FRS 102; the information above is only a broad summary.

HMRC has published on line guidance which addresses the key tax implications of transition to FRS 101 and FRS 102, which can be found here:

https://www.gov.uk/government/publications/accounting-standards-the-uk-tax-implications-of-new-uk-gaap (Gov.uk page).