The UK Financial Reporting Council (‘FRC’) has issued proposals to amend UK and Irish accounting standards. The proposals are set out in more detail in:
The proposals will impact a large number of companies in Ireland by simplifying reporting requirements for eligible companies.
Key aspects of the FRC’s proposals include:
- The withdrawal of the FRSSE (Financial Reporting Standard for Smaller Entities) for accounting periods beginning on or after 1 January 2016;
- A new accounting standard for micro-entities1 offering some simplifications in accounting;
- For eligible small companies2, recognition and measurement requirements aligned with new UK and Irish GAAP, amendments to presentation and disclosure requirements; and
- Greater flexibility in relation to the format of the profit and loss account and balance sheet in FRS 101, allowing the use of IFRS-based presentation requirements similar to those used for group accounts.
The proposals are intended to be effective for accounting periods beginning on or after 1 January 2016, with early application permitted for accounting periods beginning on or after 1 January 2015. The proposals are open for comment until 30 April 2015 and the final standards and amendments are expected to be issued in July 2015.
IAASA encourages all interested parties to comment on the draft proposals.
1 The public consultation undertaken by the Department of Jobs, Enterprise and Innovation on the use of Member State options under Directive 2013/34/EU closed on 31 March 2014.
2 For Irish entities, small companies are referred to in Section 8 of The Companies (Amendment) Act 1986 [Section 350 of the Companies Act 2014]. The current equivalent size criteria are: Turnover not exceeding €8.8m, Balance Sheet total not exceeding €4.4m, and number of employees not exceeding 50.