The FRC has completed a triennial review of FRS 102 and confirmed the simplification of the measurement of directors’ loans to small entities, following the interim relief granted earlier this year.
The other principal amendments to FRS 102:
- require fewer intangible assets to be separated from goodwill in a business combination;
- permit investment property rented to another group entity to be measured by reference to cost, rather than fair value;
- expand the circumstances in which a financial instrument may be measured at amortised cost, rather than fair value; and
- simplify the definition of a financial institution.
Amendments are also made to provide relief from recognising tax payable when a trading subsidiary expects to make a distribution of a gift aid payment to its charitable parent, and to incorporate the new small entities and micro-entities regimes in the Republic of Ireland (the latter by amendments to FRS 105). Editorial amendments and clarifications will increase the ease of use of the standards.
Paul George, Executive Director, Corporate Governance & Reporting, said:
We are grateful for stakeholders’ engagement with the triennial review, which has enabled us to identify and respond to implementation issues following the introduction of FRS 102 from 2015. As a result of these amendments, FRS 102 has been simplified and will be more cost-effective and easier to use
In general these amendments are effective for accounting periods beginning on or after 1 January 2019, with early application available. The amendments to incorporate the small entities and micro-entities regimes in the Republic of Ireland are effective for accounting periods beginning on or after 1 January 2017.