So the UK standard-setter will not be issuing the triennial review phase two exposure draft which was scheduled for later in the year. Similarly, although it intends to review FRS 103 at some stage to align it more closely with IFRS 17, Insurance Contracts, this exercise will also only take place once more IFRS implementation experience is available.
In September last year, the FRC issued a consultation document, seeking views on the principles to be applied in developing and maintaining financial reporting standards, on its approach to changes in IFRS and the cost-effectiveness of the requirements relating to accounting for share-based payments.
In its feedback statement, the FRC reveals that almost all the respondents supported the proposed revised principles. These have already been adopted in developing FRED 67, Draft Amendments to FRS 102 – Triennial Review 2017 – Incremental Improvements and Clarifications.
However, there was a significant minority of respondents who did not agree with the proposed FRED, due out this autumn, containing proposals to incorporate the principles of the expected loss model of IFRS 9, Financial Instruments, and IFRS 16, Leases.
“Respondents largely agreed that harmonisation of FRS 102 with changes in IFRS should be a long-term aim,” the statement says, “but questioned the appropriateness of the proposed timetable for development and implementation, with many stating that more IFRS implementation experience is needed before an assessment of whether and if so how and when requirements based on these standards should be considered for incorporation.”
The FRC says that it understands the need for periods of stability so that new requirements can bed down and the cost-effectiveness of financial reporting can be maximised. Nevertheless it will continue to assess emerging issues and reserves the right to take action when and where it deems it necessary. This may include amendments to standards outside the regular review cycles.
Welcoming the FRC's announcement, head of the ICAEW financial reporting faculty Nigel Sleigh-Johnson said, "I am very supportive of the FRC’s decision to focus on incremental improvements and clarifications to FRS 102 at this stage. The standard is still bedding down so this is not the time to make fundamental changes.
"Now is not the time to begin working on incorporating IFRSs 9, 15 and 16 into UK GAAP. It make sense in my view to learn lessons from the IFRS adopters who will apply these standards in 2018 and 2019, before crafting abridged or amended versions for use by UK GAAP adopters."