The Financial Reporting Council (FRC) is consulting on proposals to make a small number of additional disclosure exemptions to FRS 101, Reduced Disclosure Framework, in order to make financial reporting for entities within groups more streamlined and efficient.
The regulator said the consultation is in line with its commitment to update FRS 101 annually to ensure that the reduced disclosure framework remains consistent with IFRS.
Melanie Mclaren, the FRC’s executive director codes and standards, said: ‘FRS 101 provides a cost-effective method for groups to apply accounting policies to the individual financial statements of entities across the group, consistent with those of the consolidated financial statements. The 2014/15 review of FRS 101 reflects careful consideration of a number of important developments in IFRS that have occurred during the last 12 months.’
The FRC proposes to extend the disclosure exemptions from the requirements of IFRS 1 First-time Adoption of International Financial Reporting Standards to present an opening statement of financial position on first time adoption of IFRS, and to reflect changes in the definition of related parties (in IAS 24 Related Party Disclosures) which now includes entities that provide key management personnel services to the reporting entity.
The FRC does not propose to make any amendments to FRS 101 in relation to IFRS 15, Revenue, and IFRS 9, Financial Instruments.
It also states that this financial reporting exposure draft (FRED) does not include any amendments to FRS 101 which may be necessary as a result of the implementation of the EU Accounting Directive in UK and Irish company law.
The FRC says those amendments will be exposed separately in detailed FRED(s) that will be issued in early 2015 as part of that project. It is anticipated that any amendments arising from the current consultation will be published in final form with the amendments to FRS 101 arising from the implementation of the Accounting Directive.
The comment period closes on 20 March 2015. Details of FRED 57: Draft amendments to FRS 101 Reduced Disclosure Framework (2014/15 Cycle) are here: https://frc.org.uk/Our-Work/Publications/Accounting-and-Reporting-Policy/FRED-57-Draft-amendments-to-FRS-101-Reduced-Disclo-File.pdf