Companies or groups currently following UK GAAP will need to move to FRS 101, FRS 102 or full EU-adopted IFRSs for periods beginning on or after 1 January 2015, with comparatives required for 1 January 2014 onwards. FRS 101 and 102 may be adopted early for accounting periods ending on or after 31 December 2012. Of course, companies and groups can alternatively transition to full EU-adopted IFRSs at any time.
Change is no longer hovering beyond the horizon but coming clearly into view. These developments have far-reaching implications for nearly all UK reporters. Affected companies will need to start thinking about how the change will impact their financial statements and tax returns and consider the wider business impacts including distributable profits, banking arrangements, systems and performance management. Done right, and at the right time, these changes could streamline group accounting and tax processes for the long term.
The transition to a new GAAP requires input from many stakeholders within a company and tax should be on the agenda from the start
FRS 101, the IFRS reduced disclosure framework for qualifying entities, was published at the end of 2012. FRS 102, the Financial Reporting Standard applicable in the UK and Republic of Ireland, was published in March 2013. Adoption is mandatory for accounting periods beginning on or after 1 January 2015, although early adoption is possible.
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