Numerous changes have been made however several changes could potentially have a significant impact on the preparation and audit of financial statements using FRS 102 and are discussed below.
Gift aid payments made by wholly owned subsidiaries to their charity parents must be treated as distributions. The triennial amendment to FRS 102 allows for the tax effects of such future payments to be taken into account at the reporting date i.e. the subsidiary will not have to show a tax charge against taxable profits that are to be gift-aided to their charitable parent.
Smallentities - long-term interest-free loans granted by a person within a director's group of close family members that includes at least one shareholder in the entity now have the option to record the loan at transaction price, not the discounted value. This will avoid the complex requirement of using and justifying a suitable interest rate to discount the loan.
Previously FRS 102 required all investment property to be held at fair value through the profit or loss, including property that an entity rented to another group company.
In the case of investment property where an entity rents that property to another group entity, an accounting policy choice has been introduced - the property can now either carry the property at fair value through profit or loss, or the investment property can be carried at cost less depreciation and impairment.
Large company reporting requirements
New legislation 'Companies (Miscellaneous Reporting) Regulations 2018' is effective for accounting periods beginning on or after 1 January 2019.
The highlights of the changes include:
For further details of the changes highlighted above please contact us.