We use cookies to give you the best online experience. By using our website you agree to our use of cookies in accordance with our cookie policy. Learn more here.Close Me
The originally proposed three-tier framework has been
considerably simplified. In particular, there is no longer a
proposed requirement for all 'publically accountable'
entities to report under full IFRS. This is good news for credit
unions and other not-for-profit entities that might have otherwise
been caught by the ASB's definition of publically accountable.
The new framework requires only those entities that are currently
obliged to prepare accounts under full EU-adopted IFRS to continue
to do so, and does not extend this requirement. Company law in the
UK does not currently permit charities to prepare accounts under
full EU-adopted IFRS.
Other significant changes from the previous proposals were:
replacing the IFRS formats for the income statement and balance
sheet with the formats currently set out in UK company law
allowing alternative treatments permitted under current UK
GAAP, such as revaluation of tangible and intangible fixed
assets
permitting the capitalisation of borrowing costs
permitting the capitalisation of development costs if certain
criteria are met
the inclusion of guidance for the use of merger accounting in
group reconstruction situations and mergers of not-for-profit
entities
the amalgamation of the proposed public benefit entity
reporting standard into the draft of FRS 102.
Some consequential amendments to the FRSSE will be made as a
result of this changing framework. The presumed useful economic
life of goodwill will be reduced from 20 years to 5 years to be
consistent with the treatment under FRS 102.
The proposed effective date for the new framework is for
accounting periods beginning on or after 1 January 2015. This means
that the transition date is 1 January 2014 as entities will have to
prepare an opening balance sheet for the comparative period for
their first set of accounts under the new standard.
The charities SORP is also undergoing revision. As well as being
updated for the changes in FRS 102, the SORP committee is
considering other feedback and research findings to improve the
SORP, as follows.
Think small first: the SORP will be written to be more
accessible to smaller charities.
The current SORP contains a lot of guidance and is therefore a
long document: the new SORP will seek to rebalance
guidance/length.
Where possible, less technical language will be used, so that
the SORP is more accessible.
A modular format will be adopted to make it easier for
charities to access the parts which are relevant to their specific
circumstances. (For example, there will be separate modules for
charities applying FRS 102 and for those applying FRSSE.)
Currently, most charities are eligible to adopt the FRSSE, but
many of them do not as the current SORP imposes significant
disclosure requirements which eliminate the benefits of the FRSSE.
However, in the future, such charities may be tempted to use the
FRSSE rather than transition to FRS 102.
The SORP will also have to be issued for consultation, but the
timing of this is dependent on the issue of a final version of FRS
102 by the Financial Reporting Council.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Business Owners often ask whether a contract that their company is entering into can in fact take effect from an earlier date compared to the date on which it is to be signed by the parties.
The new Companies House registration regime seeks to modernise and streamline the charge registration process and a new, optional, online registration system has been introduced.
The recent case of Petroleo Brasiliero v E.N.E. Kos 1 Limited is a timely example of how the historical principles of bailment remain highly relevant today and how the law on bailment is still developing.
The attitude of the courts is shifting in favour of extending the occasions when liquidated damages clauses in business to business contracts are upheld.
After three years of consultation, new Companies House registration requirements have now come into force and apply to charges created on or after 6 April 2013 by companies and limited liability partnerships registered in England and Wales.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
