FRS102 and FRS105

FRS 102: The Financial Reporting Standard applicable in the UK and Republic of Ireland. FRS 102 is available for use by UK unlisted groups and listed or unlisted individual entities preparing financial statements that are intended to give a true and fair view. FRS 102 is designed to apply to the general purpose financial statements and financial reporting of entities including those that are not constituted as companies and those that are not profit-oriented. This FRS 102 is a single financial reporting standard replacing old UK GAAP. It is a fair value accounting which to give a true and fair view of the assets, li­ab­il­it­ies, financial po­s­i­tion and profit or loss of the entity for the re­port­ing period.

FRS 102 issued 14 March 2013 and effective for periods beginning on or after 1 January 2015. After that some amendments and revised to FRS 102, most recent published is March 2018. most recent amendments May 2019 and December 2019 its effective from 1 January 2020.

The standard comprises 35 sections, each of which addresses a specific area of accounting, including details of fare value accounting, recognition, measurement, terminology, presentation, format, accounting policy and disclosures.

FRS 102-1A: This Section 1A for small entities which meets the size criteria for a small-entity if it does not exceed at least two of the following three thresholds in relation to a financial year: From 6 April 2025 Turnover: £15 million (before £10.2m) adjusted for periods longer or shorter than 12 months. Balance sheet: £7.5 Million (before £5.1m), and Average number of employees: 50 or less. FRS102-1A reduce disclosure is effective for accounting periods beginning on or after 1 January 2016. Small entities must apply the recognition and measurement requirements of FRS102 in full but are subject to different presentation and disclosure requirements (usually 13 disclosure). However, the financial statements of a small entity must also include any extra disclosures if material and necessary for them to give a true and fair view of the assets, li­ab­il­it­ies, financial po­s­i­tion and profit or loss of the entity for the re­port­ing period. Currently, its not require to submit profit & loss, OCI, SOCIE , Cash flow and director report to company house. But Company House submission requiremets is changing. Under this new framework, all small companies, including micro-entities, will be required to file their profit and loss accounts. Having key information such as turnover and profit or loss available on the public register will help creditors and consumers make better-informed decisions. It will also improve the value of the information on the register for users. For more information about the FRS 102, click here.

FRS 105: FRS 105 The Financial Reporting Standard applicable to the Micro-entities Regime is a new accounting standard applicable to the smallest entities. It published 16 July 2015. effective for accounting periods beginning on or after 1 January 2016. An entity meets the size criteria for a micro-entity if it does not exceed at least two of the following three thresholds in relation to a financial year: From 6 April 2025, Turnover: £1 Million or less (adjusted for periods longer or shorter than 12 months) Balance sheet: £500,000 or less, and Average number of employees: 10 or less. After the first financial year of the entity, the criteria must be met in two consecutive years for an entity to qualify as a micro-entity and must be exceeded in two consecutive years to cease to qualify.

FRS 105 is a single accounting standard which based on FRS 102. The standard comprises 28 sections, each of which addresses a specific area of accounting, including details of recognition, measurement, terminology, presentation, format, accounting policy and disclosures. FRS 105 not require to revaluing or subsequently measuring assets or liabilities at fair value, apply historical cost, one line current assets and current liability on balance sheet, not require to submit profit & loss and director report to company house. Only disclosure require for any arrangements that are not reflected in its statement of financial position if it is material, average number of employee, advance & credit to director and financial commitment & guarantee as the foot note of Balance sheet. But Company House submission requiremets is changing. Under the new framework, all small companies, including micro-entities, will be required to file their profit and loss accounts. Having key information such as turnover and profit or loss available on the public register will help creditors and consumers make better-informed decisions. It will also improve the value of the information on the register for users. For more information about the FRS 105, click here.