This follows on from the publication in November 2012 of FRS 100 “Application of Financial Reporting Requirements” and FRS 101 “Reduced Disclosure Framework”.
All existing UK and Irish GAAP standards – SSAPs, FRSs and UITFs – will be withdrawn and replaced with three new FRSs.
It is time to embrace the financial reporting and commercial challenges which the impending change will inevitably bring!
It is likely that over 95% of entities in Ireland will be required to change their accounting rules as a result of the new framework with the majority expected to adopt FRS 102, a set of rules based largely on “IFRS for SMEs”.
Depending on the nature of their operations, entities adopting FRS 102 will face many changes in the requirements applicable to key areas of financial reporting. Undoubtedly, the most challenging issue for most will be the increased use of fair value measurement.
Key changes to the requirements in respect of business combinations, leases and other arrangements, deferred tax and investment properties will also need detailed consideration.
Mandatory adoption is required for accounting periods beginning on or after 1 January 2015 and companies should begin to consider the commercial impact of the new requirements will have, particularly when entering into multi-year arrangements and structures which will survive the transition.