The Financial Reporting Council (FRC) has issued limited amendments to FRS 101 Reduced Disclosure Framework following its annual review of the standard, and is also consulting on plans to remove the requirement to notify shareholders in advance of application of the disclosure exemptions
After considering the 2015/16 annual review of FRS 101, the latest amendments principally provide certain disclosure exemptions in relation to IFRS 15 Revenue from Contracts with Customers and clarify a legal requirement relating to the order in which the notes to the financial statements are presented.
FRS 101 is an optional standard that allows entities within groups to prepare financial statements in accordance with IFRS, but with reduced disclosures. During the consultation on the amendments, the FRC received feedback on the requirement to notify shareholders before applying the disclosure exemptions in FRS 101, with respondents suggesting the cost-effectiveness of this requirement could be improved, as well as the guidance provided to ensure consistent application.
In response, the FRC has proposed FRED 65, which is now out for public consultation.
Paul George, FRC executive director, corporate governance and reporting, said: ‘In issuing these amendments we are aiming to ensure that FRS 101 remains a cost effective option for listed groups, by providing additional disclosure exemptions as IFRS changes. In addition, FRED 65 responds to feedback by consulting on eliminating an administrative burden’.
The deadline for comments on the latest consultation is 14 October. The FRC says it aims to finalise the amendments in December 2016, and proposes that they should apply to accounting periods beginning on or after 1 January 2016.