UK GAAP

How we can help with UK GAAP

We want to help you choose the right accounting framework for your business. We carry out a high level analysis for each of the framework options available covering:

• Key financial statement areas
• Key tax issues 
• Terms of existing financing to identify covenants that may be breached due to different reporting measures
• Other commercial issues, for example distributable reserves issues. 

We can help you prepare for conversion and support you through the implementation process for the new framework to ensure it runs smoothly.

We can then help you identify the precise implications of changes. This may include first time adoption adjustments on your financial statements and the timing and amount of any tax payments to HMRC.

Following implementation of a new framework, your BDO team will keep you up to date about any changes to GAAP, including amendments proposed as a result of FRC triennial reviews.

Should you need to transition to a new or different accounting framework, we will assist you throughout this complex and time-consuming process.

Explore how BDO’s Financial Reporting solutions team can help.
 

Changes to UK GAAP

On 27 March 2024, the FRC issued amendments to FRS 102 and other FRSs following the conclusion of its second periodic review of the FRSs.

The amendments expected to have significant impact on the financial statements are:

• Revised revenue accounting requirements in FRS 102 and FRS 105, based on the IFRS 15 five-step model for revenue recognition, with appropriate simplifications
• Revised lease accounting requirements in FRS 102 based on the IFRS 16 ‘on-balance sheet' model, again with appropriate simplifications.

Other incremental improvements and clarifications to FRS 102 include:

• Greater clarity for small entities in the UK applying Section 1A Small Entities regarding which disclosures need to be provided in order to give a true and fair view
• A revised Section 2 Concepts and Pervasive Principles, updated to reflect the International Accounting Standards Board’ (IASB’s) Conceptual Framework for Financial Reporting, issued in 2018
• A new Section 2A Fair Value Measurement, replacing the Appendix Fair Value Measurement to Section 2 and updated to reflect the principles of IFRS 13 Fair Value Measurement
• Removal of the option to newly adopt the recognition and measurement requirements of IAS 39 Financial Instruments: Recognition and Measurement under paragraphs 11.2(b) and 12.2(b) (unless needed to achieve consistency with group accounting policies), in anticipation of an eventual removal of this option, but permitting entities already applying the option to continue to do so in the meantime.

The principal effective date for these amendments is accounting periods beginning on or after 1 January 2026, with early application permitted provided all amendments are applied at the same time. Transitional provisions are also included.

Earlier effective dates apply to new disclosures about supplier finance arrangements in Section 7 Statement of Cash Flows of FRS 102 (periods beginning on or after 1 January 2025, with early application permitted).

Our FRS 102 amendments publication provides a comprehensive summary of the significant differences between the new FRS 102 and the old FRS 102.

We will help you understand the implications of changes in UK GAAP and arm you with the information to make the correct choices for your business.

Model FRS 102 accounts

These are illustrative FRS 102 financial statements of a large private entity (company and LLP), prepared in accordance with FRS 102, including UK Companies Act disclosure requirements as applicable. You can download an illustrative set of FRS 102 accounts below.

• Limited Company FRS 102 Illustrative Financial Statements 2023
• LLP (Limited Liability Partnership) FRS 102 Illustrative Financial Statements 2021

These illustrative FRS 102 financial statements are intended to be used as a source of general technical reference, as they show suggested disclosures together with their sources. They are not intended to address the particular circumstances of any particular entity.
 

Model FRS 101 accounts

These are illustrative FRS 101 financial statements of a private intermediate parent company, prepared in accordance with FRS 101, including UK Companies Act disclosure requirements as applicable.

• Limited Company FRS 101 Illustrative Financial Statements 2023

These illustrative FRS 101 financial statements are intended to be used as a source of general technical reference, as they show suggested disclosures together with their sources. They are not intended to address the particular circumstances of any particular entity.

The illustrative accounts contain two appendices to aid you in understanding the potential differences between financial statements prepared under FRS 101 and those prepared under IFRS:

• Appendix 1 - a summary of the disclosure exemptions within FRS 101 and whether these exemptions are subject to equivalent disclosures being included within the consolidated accounts.
• Appendix 2 - a summary of the key accounting differences between FRS 101 and IFRSs.

If you want to talk to someone about your obligations under UK GAAP, get in touch with our expert team, who will be happy to help.

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