The guidance amends early application of FRS 102 in the UK and Republic of Ireland by entities within the scope of a statement of recommended practice (SORP). It permits early application of FRS 102 for accounting periods ending on or after 31 December 2012, but where an entity is within the scope of a SORP early application is only permitted where that does not conflict with the requirements of a current SORP or legal requirement for the preparation of financial statements.
All SORP-making bodies are working to update their SORPs for FRS 102, although the FRC says that current SORPs will not necessarily conflict with FRS 102 even if drawn up prior to the introduction of the standard.
Changes have also been made to Section 29 on income tax. These clarify the the phrase ‘the amount that can be deducted for tax’ as a defined term in this instance.
The FRC says, “In applying this paragraph an entity should consider the manner in which it expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. This assessment should include consideration of all taxes, including operating taxes and taxes arising from the sale of the item, if appropriate.”
A report earlier his year showed “significant” numbers of companies are deciding to adopt FRS 102 early, rather than wait until 2015 when its implementation becomes mandatory.
Feedback to the FRC and to accountancy firms showed that there a huge amount of goodwill towards the new UK GAAP which offers those companies that are not required to prepare group accounts in accordance with EU-adopted IFRS an alternative to full IFRS implementation.
The statements in full can be read here.