PREPARING FOR FRS 102 THE NEW UK...
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Transition Checklists & Appendices
PREPARING FOR FRS 102 – THE NEW UK GAAP
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Preparing for FRS 102 – the New UK GAAP
Transition Checklist and Appendices
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Transition Checklists and Appendices
This document is used during the presentation of the seminar: Preparing for FRS 102 – the New UK GAAP It is subject to copyright law and should not be reproduced by any unauthorised person for their own use, selling on to a third person or for presentation to other people. UK Training (Worldwide) Limited 17 Duke Street Formby L37 4AN e-mail:[email protected] Telephone: 01704 878988 Facsimile: 01704 832124 www.uktraining.info
Preparing for FRS 102 – the New UK GAAP
Transition Checklist and Appendices
© UK Training (Worldwide) Limited 2
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Preparing for FRS 102 – the New UK GAAP
Transition Checklist and Appendices
© UK Training (Worldwide) Limited 3
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CONTENTS
Page
Transition Checklist
Checklist 1: Project Plan 5
Checklist 2: Which sections of FRS 102 apply? 7
Checklist 3: Accounting policy choice checklist 10
Checklist 4: Transition exemption choices 12
Appendix 1: 14
FRS and UITF abstracts in issue at 1 July 2013 replaced by FRS 102
Appendix 2: 16
Extract from Companies Act formats
Appendix 3: 18
Structure of FRS 102
Appendix 4: 19
Scope of relevant sections
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Preparing for FRS 102 – the New UK GAAP
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TRANSITION CHECKLIST
CHECKLIST 1: PROJECT PLAN
These checklists can be completed for each entity within the group or for the group as a whole.
Step Action Guidance Sign off
1. Which GAAP are you transitioning to?
IFRS
FRS 101
FRS 102
FRS 102 plus reduced disclosures
FRSSE / FRS 102 provisions applicable to small companies
2. Identify first FRS 102 period end Accounting period commencing on or after 1 January 2015
3. Identify date of transition The beginning of the earliest period for which an entity presents full comparative information in a given standard in its first financial statements that comply with that standard.
4. Decide on form and content of financial statements
Old UK GAAP or FRS 102 terminology? OLD / FRS 102
Single or double income statement? SINGLE / DOUBLE
Cash flow statement required? YES / NO
Statement of income and retained earnings? YES / NO
Group accounts required? YES / NO
5. Identify relevant sections of FRS 102
Complete transition checklist 2
6. Consider accounting policy choices
Complete transition checklist 3
7. Consider available exemptions and decide whether or not to take advantage
Complete transition checklist 4
8. Review agreements, contracts and other issues which may need to be amended before transition
Leases
Employment contracts
Financial instruments
Loan agreement
9. Restate the balance sheet at the date of transition applying the recognition and measurement of principles and taking account of the exemptions adopted at step 5, ensuring that the exceptions in section 35 are complied with. Note: tax effects can be dealt with here or in step 11 below.
Recognise all assets and liabilities whose recognition is required by FRS 102
Exclude assets or liabilities which would not be recognised under FRS 102
Reclassify items under UK GAAP such that they are classified as under FRS 102
Measure all assets and liabilities according to the requirements of FRS 102
Adjust net effect against opening equity (i.e. equity at date of transition.)
10. Restate the comparative figures on the same basis as in step 8. Note: tax effects can be dealt with here or in step 11 below.
See above
11. Prepare draft figures for the See above
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current year in accordance with FRS 102 and taking into account the exemptions and exceptions identified above.
12. Prepare the tax computations for the first year of adoption of FRS 102
Restate current and deferred tax liabilities at date of transition (see 8 above).
Restate tax charge and tax liabilities in adjusted comparative figures (see 9 above).
Compute tax based on taxable profit for the year including adjustment income or expense as appropriate (see 10 above).
Compute deferred tax charge and liability for first year of compliance with FRS 102
13. Finalise financial statements incorporating tax charges and balances from above steps.
14. Prepare the required reconciliations and explanation required by Section 35.
Prepare reconciliation between equity at the date of transition and end of comparative period under old GAAP and FRS 102
Prepare reconciliation between the profits for the year as reported under old GAAP, and FRS 102
Explain transition
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CHECKLIST 2 – WHICH SECTIONS OF FRS 102 APPLY
This checklist is designed to identify whether sections of FRS 102 apply.
Section Subject Reference Sign off
1 Scope Section 1 YES
2 Concepts and pervasive principles Section 2 YES
3 Financial statement presentation Section 3 YES
4 Statement of financial position Section 4 YES
5 Statement of comprehensive income and income statement Section 5 YES
6 Statement of changes in equity Section 6 YES
7 Statement of cash flows Section 7 YES
8 Notes to the financial statements Section 8 YES
Each of the above will apply to all entities
9 Consolidated and separate financial statements
9.1 Does the entity have an investment in subsidiaries requiring the preparation of group accounts?
YES / NO
9.2 Does the entity have any intermediate payment arrangements?
9.33 – 9.38 YES / NO
10 Accounting policies Section 10 YES
Will apply to all entities
11 Basic financial instruments
11.1 Does entity have any basic financial instruments at amortised cost?
Section 11 YES / NO
11.2 Does entity have any investments in non-convertible preference shares and non-puttable ordinary shares
11.14(d) YES / NO
11.3 Does entity have any debt instruments which can be designated as fair value through profit and loss account if doing this results in more relevant information
11.14(b) YES / NO
12 Other financial instruments issues
12.1 Does entity have any non-basic financial instruments e.g. Derivative financial instrument or complex loans
Section 12 YES / NO
12.2 Does the entity use hedging instruments as part of a hedging strategy?
12.15 – 12.25 and FRED 52
YES / NO
13 Inventories
13.1 Does entity have inventories? Section 13 YES / NO
14 Investments in associates
14.1 Does entity have investments in associates? Section 14 YES / NO
15 Investments in joint ventures
15.1 Does the entity have any investments in joint ventures? Section 15 YES / NO
16 Investment property
16.1 Does entity have Investment property? Section 16 YES / NO
16.2 Is any investment property Mixed use property? 16.4 YES / NO
16.3 Is any investment property used for the provision of social benefits?
16.3A YES / NO
17 Property plant and equipment
17.1 Does entity have any property, plant and equipment? Section 17 YES / NO
18 Intangible assets other than goodwill
18.1 Does entity have any acquired intangible assets? Section 18 YES / NO
18.2 Does entity have any internally generated intangibles? 18.8A– 18.D & 18.10
YES / NO
18.3 Is the entity involved in research and development? 18.8E-18.8K YES / NO
19 Business combinations and goodwill
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19.1 Has entity made any acquisitions before the date of transition?
Section 19 YES / NO
19.2 Has entity been involved in any group reconstructions? 19.27 – 19.33 YES / NO
20 Leases
20.1 Does entity have finance leases as lessee? 20.9 – 20.14 YES / NO
20.2 Does entity have operating leases as lessee? 20.15 – 20.16 YES / NO
20.3 Does entity have finance leases as lessor? 20.17 -20.23 YES / NO
20.4 Does entity have operating leases as lessor? 20.24 – 20.31 YES / NO
20.4 Has entity been involved in sale and lease back transactions? 20.32 – 20.35 YES / NO
20.6 Did entity receive any lease incentives? 20.15A YES / NO
21 Provisions and contingencies
21.1 Is entity required to include any provisions other than for deferred tax?
21. 1 – 21.11, 21.14 – 21.17A plus appendix
YES / NO
21.2 Does entity have any onerous contracts? 21.11A YES / NO
21.3 Does the entity expect to make future operating losses? 21.11B YES / NO
21.4 Is the entity considering restructuring? 21.11C & D YES / NO
21.5 Does entity have any contingent liabilities? 21.12 YES / NO
21.6 Does entity have any contingent assets? 21.13 YES / NO
22 Liabilities and equity
22.1 Does entity have liabilities and equity? Section 22 YES / NO
22.2 Does entity have any convertible debt? 22.13 – 22.15 YES / NO
22.3 Does entity have any Treasury shares? 22.16 YES / NO
22.4 Does entity have Non-controlling interest? 22.19 YES / NO
22.5 Did entity issue equity? 22.7 – 22.10 YES / NO
22.6 Did entity make any distributions? 22.17 – 18 YES / NO
23 Revenue
23.1 General principles 23.1 – 23.18 and 23.30 -23.32
YES
23.2 Does entity generate revenue on deferred payment terms? 23.5 YES / NO
23.3 Does entity have any transactions with more than one component?
23.8 – 23.9 YES / NO
23.4 Does entity sell goods? 23.10 – 23.13 YES / NO
23.5 Does entity render of services? 23.14 – 23.16 YES / NO
23.6 Does entity have any construction contracts? 23.17 – 23.27 YES / NO
23.7 Does entity have any interest receivable, royalties and dividends receivable?
23.28 – 23.29 YES / NO
24 Government grants
24.1 Has the entity received any government grants? Section 24 YES / NO
25 Borrowing costs
25.1 Does entity wish to adopt a policy of capitalising borrowing costs?
Section 25 YES / NO
26 Share based payments
26.1 Does entity have any equity settled share-based payment transactions?
26.3 – 26.13 YES / NO
26.2 Does entity have any cash-settled share-based payment transactions?
26.3 – 26.6 & 26.14
YES / NO
26.3 Were there any modifications, cancellations and settlements?
26.13 YES / NO
26.4 Do the share based payment transactions carry cash alternatives?
26.15 YES / NO
26.5 Are there any group plans? 26.16 YES / NO
26.6 Are there any government mandated plans? 26.17 YES / NO
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27 Impairment of assets
27.1 Impairment review of inventories annually is required 27.2 – 27.4 YES
27.2 Is there evidence of impairment of Goodwill? 27.5 – 27.23 & 27.24 – 27
YES / NO
27.3 Is there evidence of impairment of Other intangible assets 27.5 – 27.23 YES / NO
27.4 Is there evidence of impairment of Property plant and equipment?
27.5 – 27.23 YES / NO
27.5 Is there evidence of a reversal of an impairment loss? 27.28 – 27.31 YES / NO
28 Employee benefits
28.1 Does entity have employment costs? 28.1 – 28.5 YES / NO
28.2 Does entity have any accumulating short term compensated absences
28.6 – 28.7 YES / NO
28.3 Does entity have profit-sharing or bonus plans? 28.8 YES / NO
28.4 Does entity provide pension benefits under a defined contribution pension plan
28.9- 28.13A YES / NO
28.5 Does entity provide pension benefits under a defined benefit pension plan
28.9 – 28.12 & 28.14 – 28.28
YES / NO
28.6 Did the entity provide any termination benefits? 28.31 – 28.37 YES / NO
28.7 Does entity provide pension benefits under a multi-employer plan
28.38 YES / NO
28.9 Does entity provide pension benefits under a group plan 28.38 YES / NO
29 Income tax
29.1 Is the entity liable to taxation? Section 29 YES / NO
30 Foreign currency translation
30.1 Does the entity have any foreign currency transactions? 30.2 – 30.11 YES / NO
30.2 Does the entity have an investment in a foreign operation? 30.12 – 30.13 YES / NO
30.3 Did entity change its functional currency? 30.14 – 30.16 YES / NO
30.4 Does entity use a presentation currency other than its functional currency?
30.17- 30.23 YES / NO
31 Hyperinflation
31.1 Does the entity operate in a hyperinflationary economy? Section 31 YES / NO
32 Events after the end of the reporting period
32.1 Will apply to all entities YES
33 Related party disclosures
33.1 Will apply to all entities YES
34 Specialised activities
Does entity operate in any of the following areas:
34.1 Agriculture? 34.2 – 34.10A YES / NO
34.2 Extractive industries? 34.11 – 34.11C YES / NO
34.3 Service concession arrangements? 34.12 – 34.16 YES / NO
34.4 Financial institution? 34.17 – 34.33 YES / NO
34.5 Retirement benefit plans? 34.34 – 34.48 YES / NO
34.6 Heritage assets? 34.49 – 34.56 YES / NO
34.7 Funding commitments? 34.57 – 34.63 YES / NO
34.8 Public benefit entity incoming resources from non-exchange transactions?
PBE 34.64 – 34.66 YES / NO
34.9 Public benefit entity combinations? PBE 34.75 – 34.86 YES / NO
34.10 Public benefit entity concessionary loans? PBE 34.87- 34.97 YES / NO
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CHECKLIST 3 – ACCOUNTING POLICY CHOICE CHECKLIST
1 FRS 102 Section 9 – Treatment in separate financial statements
1.1 Has entity an investment in Subsidiaries? YES / NA
Cost less impairment
Fair value with changes in other comprehensive income
Fair value with changes in fair value with changes in profit and loss account
1.2 Has entity an investment in Associates? YES / NA
Cost less impairment
Fair value with changes in other comprehensive income
Fair value with changes in fair value with changes in
1.3 Has entity an investment in Joint ventures? YES /NA
Cost less impairment
Fair value with changes in other comprehensive income
Fair value with changes in fair value with changes in
2 FRS 102 Section 11 – treatment of certain debt instruments
2.1 Does the entity have any debt instruments which satisfy the requirements of section 11.14 (b) permitting inclusion at fair value through profit and loss as it provides more relevant information?
YES /NA
Effective interest method
Fair value through profit and loss account
3 FRS 102 – other financial instrument issues
3.1 Has entity any non-basic debt instruments? YES /NA
Follow Section 11 and 12
Recognition and measurement of IAS 39 and disclosure requirements of FRS 102 sections 11 and 12
Recognition and measurement of IFRS 9 and disclosure requirements of FRS 102 sections 11 and 12
3.2 Does entity have any hedging instruments? YES /NA
Apply hedge accounting
Do not apply hedge accounting
4 FRS 102 – Section 14 Investments in associates
4.1 Is the entity a non-parent investor with an investment in an associate? YES / NA
Cost model
Fair value model
Fair value with changes in profit and loss account
5 FRS 102 – Section 15 Investments in joint venture
5.1 Is the entity a non-parent investor with an investment in a jointly controlled entity?
YES /NA
Cost model
Fair value model
Fair value with changes in profit and loss account
6 FRS 102 – Section 17 Property, plant and equipment YES / NA
6.1 For each class of property plant and equipment, the entity has an accounting policy choice after initial recognition.
Cost model
Revaluation model
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7 FRS 102 – Section 18 Intangible assets other than goodwill YES / NA
6.2 For each class of intangible assets the entity has an accounting policy choice, provided that reliable valuations can be made.
Cost model
Revaluation model
8 FRS 102 – Section 21 Provisions and contingencies
8.1 Does the entity have any financial guarantee contracts? YES / NA
FRS 102 Section 21
Entity has chosen to apply IAS 39
Entity has elected under FRS 103 to continue insurance contract accounting
9 Government grants YES / NA
9.1 For each class of government grants, the entity has an accounting policy choice for recognition and measurement
Performance model
Accrual model
10 FRS 102 Section 25 Borrowing costs YES / NA
10.1 Inventory Capitalise
Not capitalise
10.2 Property, plant and equipment Capitalise
Not capitalise
11 FRS 102 Section 30 Foreign currency translation YES / NA
11.1 Does entity wish to use a presentation currency other than its functional currency?
Yes
No
12 FRS 102 Section 34
12.1 Does the entity have any biological assets and / or related biological produce?
YES / NA
Fair value model
Cost model
12.2 Does the entity have any public benefit entity concessionary loans? YES/NA
Follow sections 11 & 12
Follow section 34.90 – 34.97
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CHECKLIST 4: TRANSITION EXEMPTION CHOICES
The questions in the checklist should be answered in relation to the date of transition. If it is impracticable to restate at the date of transition FRS 102 35.11 requires the restatement and exemptions to be considered at the earliest date it is practicable to do so.
Ref. Exemption Choice
1. Has entity made any business combinations, including group reconstruction before the date of transition
YES / NO
Restate under Section 19
Continue under old GAAP. May not continue with old GAAP for any business combinations after the date of any acquisition which is restated under S 19.
2. Does entity have Share based payments? YES /NO
Restate under Section 26
Continue under old GAAP
3. Does entity wish to use fair value as deemed cost?
Property plant and equipment YES / NO
Investment property YES / NO
Intangible asset YES / NO
4. Does entity wish to use revaluation as deemed cost? (If No restate under FRS 102)
Property plant and equipment YES / NO
Investment property YES / NO
Intangible asset YES / NO
5. Does the entity have an investment in subsidiaries, associates or joint ventures?
YES / NO
Subsidiaries Cost under Section 9
Carrying value under previous GAAP as deemed cost
Associates Cost under Section 9
Carrying value under previous GAAP as deemed cost
Joint ventures Cost under Section 9
Carrying value under previous GAAP as deemed cost
6. Does the entity have any compound financial instruments where the liability is no longer outstanding at the date of transition?
YES / NO
Separate
Do not separate
7. Does the entity have any Service concession arrangements YES / NO
Restate under FRS 102 34.12E to 34.16A
Continue under old GAAP
8. Does the entity have any Extractive activities – where accounted for exploration and development costs for oil and gas in development phases?
YES / NO
Follow FRS 102 34.11
Follow transitional provisions in 35.10 (j)
9. Does entity have an arrangements containing a lease? YES / NO
For each lease determine whether an arrangement constitutes a lease
At date of commencement of lease
At date of transition
10. Does entity have to include an initial measurement of the cost of decommissioning in the cost of property plant and equipment?
YES / NO
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Measure at date obligation arose
Measure at date of transition
11. Is the entity a dormant company where there are no transactions to record other than might arise on restatement to FRS 102?
YES / NO
Retain old accounting policies
Adopt FRS 102
12. Does entity have deferred development costs under SSAP 13 YES / NO
Restate under FRS 10 2 Section 18
Use carrying value under SSAP 13 as deemed cost at date of transition
13. Does entity wish to capitalise borrowing costs? YES / NO
For each category of asset, property plant and equipment or inventory, accounting policy choice between
Capitalise from date of borrowing
Capitalise from date of transition
14. Did entity receive any lease incentives where the term of lease commenced before date of transition?
YES / NO
Restate under Section 20.15A over term of lease
Continue under UITF 28 over shorter of lease term and date rent reset to market rate
15. Did the entity enter any public benefit combinations before the date of transition?
Restate under PBE 34.75 to PBE 34.86
Continue under old GAAP – may not continue for any later business combinations once any business combination restated
16. Does subsidiary become a first time adopter later than its parent? YES / NO
Measure at the carrying amounts that would be included in the consolidate accounts based on the parent’s date of transition
Measure at the carrying amounts required by FRS 102 at the subsidiary’s date of transition
17. Does the entity have any previously recognised debt instruments which meet the criteria for designating at fair value through profit and loss account? (see FRS 11.14 and 11.8)
YES / NO
Restate based on designation at date of initial recognition
Designate at date of transition
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APPENDICES
APPENDIX 1 – FRS AND UITF ABSTRACTS IN ISSUE AT 1 JULY 2013 REPLACED BY FRS 102
SSAP 4 Accounting for government grants
SSAP 5 Accounting for value added tax
SSAP 9 Stocks and long-term contracts
SSAP 13 Accounting for research and development
SSAP 20 Foreign currency translation
SSAP 21 Accounting for leases and hire purchase contracts
SSAP 25 Segmental reporting
FRS 1 Cash flow statements
FRS 2 Accounting for subsidiary undertakings
FRS 3 Reporting financial performance
FRS 4 Capital instruments
FRS 5 Reporting the substance of transactions
FRS 6 Acquisitions and mergers
FRS 7 Fair values in acquisition accounting
FRS 8 Related party disclosures
FRS 9 Associates and joint ventures
FRS 10 Goodwill and intangible assets
FRS 11 Impairment of fixed assets and goodwill
FRS 12 Provisions, contingent liabilities and contingent assets
FRS 13 Derivatives and other financial instrument disclosures
FRS 15 Tangible fixed assets
FRS 16 Current tax
FRS 17 Retirement benefits
FRS 18 Accounting policies
FRS 19 Deferred Tax
FRS 20 (IFRS 2) Share based payments
FRS 21 (IAS 10) Events after the balance sheet date
FRS 22 (IAS 33) Earnings per share
FRS 23 (IAS 21) The effects of changes in foreign exchange rates
FRS 24 (IAS 29) Financial reporting in hyperinflationary economies
FRS 25 (IAS 32) Financial instruments: Presentation
FRS 26 (IAS 39) Financial instruments: Recognition and measurement
FRS 28 Corresponding amounts
FRS 29 (IFRS 7) Financial instruments; Disclosures
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FRS 30 Heritage assets
UITF 4 Presentation of long-term debtors in current assets
UITF 5 Transfers from current assets to fixed assets
UITF 9 Accounting for operations in hyperinflationary economies
UITF 11 Capital instruments: issuer call options
UITF 15 Disclosure of substantial acquisitions
UITF 19 Tax on gains and losses on foreign currency borrowings that hedge an investment in a foreign enterprise
UITF 21 Accounting issues arising from the proposed introduction of the euro
UITF 22 The acquisition of a Lloyd’s business
UITF 23 Application of the transitional rules in FRS 15
UITF 24 Accounting for start-up costs
UITF 25 National Insurance contributions on share option gains
UITF 26 Barter transactions on advertising
UITF 27 Revision to estimates of the useful economic life of goodwill and intangible assets
UITF 28 Operating lease incentives
UITF 29 Website development costs
UITF 31 Exchanges of businesses or other non-monetary assets for an interest in a subsidiary, joint venture or associate
UITF 32 Employee benefit trusts and other intermediate arrangements
UITF 34 Pre-contract costs
UITF 35 Death-in-service and incapacity benefits
UITF 36 Contracts for the sale of capacity
UITF 38 Accounting for ESOP trusts
UITF 39 (IFRIC 2) Member’s shares in co-operative entities and similar instruments
UITF 40 Revenue recognition and service contracts
UITF 41 Scope of FRS 20 (IFRS 2)
UITF 42 Reassessment of embedded derivatives
UITF 43 The interpretation of equivalence for the purposes of section 228A of the Companies Act 1985
UITF 44 (IFRIC 11) FRS 20 (IFRS 2) Groups and treasury share transactions
UITF 45 (IFRIC 6) Liabilities arising from participating in a specific market – waste electrical and electronic equipment
UITF 46 (IFRIC 16) Hedges of a net investment in a foreign operation
UITF 47 (IFRIC 19) Extinguishing financial liabilities with equity instruments
UITF 48 Accounting implications of the replacement of the retail prices index with the consumer price index with the consumer prices index for retirement benefits
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APPENDIX 2 – EXTRACT FROM COMPANIES ACT FORMATS
Balance sheet formats A. Called up share capital not paid (1) B. Fixed assets I. Intangible assets 1. Development costs 2. Concessions, patents, licences, trademarks and similar rights and assets (2) 3. Goodwill (3) 4. Payments on account II. Tangible assets 1. Land and buildings 2. Plant and machinery 3. Fixtures, fittings, tools and equipment 4. Payments on account and assets in course of construction III. Investments 1. Shares in group undertakings 2. Loans to group undertakings 3. Participating interests 4. Loans to undertakings in which the company has a participating interest 5. Other investments other than loans 6. Other loans 7. Own shares (4) C. Current assets I. Stocks 1. Raw materials and consumables 2. Work in progress 3. Finished goods and goods for resale 4. Payments on account II. Debtors (5) 1. Trade debtors 2. Amounts owed by group undertakings 3. Amounts owed by undertakings in which the company has a participating interest 4. Other debtors 5. Called up share capital not paid (1) 6. Prepayments and accrued income (6) III. Investments 1. Shares in group undertakings 2. Own shares (4) 3. Other investments IV. Cash at bank and in hand D. Prepayments and accrued income (6) E. Creditors: amounts falling due within one year 1. Debenture loans (7) 2. Bank loans and overdrafts 3. Payments received on account (8) 4. Trade creditors 5. Bills of exchange payable 6. Amounts owed to group undertakings 7. Amounts owed to undertakings in which the company has a participating interest 8. Other creditors including taxation and social security (9) 9. Accruals and deferred income (10) F. Net current assets (liabilities) (11)
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G. Total assets less current liabilities H. Creditors: amounts falling due after more than one year 1. Debenture loans (7) 2. Bank loans and overdrafts 3. Payments received on account (8) 4. Trade creditors 5. Bills of exchange payable 6. Amounts owed to group undertakings 7. Amounts owed to undertakings in which the company has a participating interest 8. Other creditors including taxation and social security (9) 9. Accruals and deferred income (10) I. Provisions for liabilities 1. Pensions and similar obligations 2. Taxation, including deferred taxation 3. Other provisions J. Accruals and deferred income (10) K. Capital and reserves I. Called up share capital (12) II. Share premium account III. Revaluation reserve IV. Other reserves 1. Capital redemption reserve 2. Reserve for own shares 3. Reserves provided for by the articles of association 4. Other reserves V. Profit and loss account Profit and loss account formats – Format 1 1. Turnover 2. Cost of sales (14) 3. Gross profit or loss 4. Distribution costs (14) 5. Administrative expenses (14) 6. Other operating income 7. Income from shares in group undertakings 8. Income from participating interests 9. Income from other fixed asset investments (15) 10. Other interest receivable and similar income (15) 11. Amounts written off investments 12. Interest payable and similar charges (16) 13. Tax on profit or loss on ordinary activities 14. Profit or loss on ordinary activities after taxation 15. Extraordinary income 16. Extraordinary charges 17. Extraordinary profit or loss 18. Tax on extraordinary profit or loss 19. Other taxes not shown under the above items 20. Profit or loss for the financial year
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APPENDIX 3 – STRUCTURE OF FRS 102
Section 1 -Scope
Section 2 – Concepts and Pervasive Principles
Section 3 – Financial Statement Presentation
Section 4 – Statement of Financial Presentation
Section 5 – Statement of Comprehensive Income and Income Statement o Appendix: Example showing presentation of discontinued operations
Section 6 – Statement of Changes in Equity and Statement of Retained Earnings
Section 7 – Statement of Cash Flows
Section 8 – Notes to the Financial Statements
Section 9 – Consolidated and Separate Financial Statements
Section 10 – Accounting Policies, Estimates and Errors
Section 11 – Basic Financial Instruments
Section 12 – Other Financial Instruments Issues
Section 13 – Inventories
Section 14 – Investments in Associates
Section 15 – Investments in Joint Ventures
Section 16 – Investment Property
Section 17 – Property, plant and equipment
Section 18 – Intangible Assets other than Goodwill
Section 19 – Business Combinations and Goodwill
Section 20 – Leases
Section 21 – Provisions and Contingencies o Appendix: Examples of recognising and measuring provisions
Section 22 – Liabilities and Equity o Appendix: Example of the issuer’s accounting for convertible debt
Section 23 – Revenue o Appendix: Examples of revenue recognition
Section 24 – Government Grants
Section 25 – Borrowing Costs
Section 26 – Share-based payments
Section 27 – Impairment of Assets
Section 28 – Employee Benefits
Section 29 – Income Tax
Section 30 – Foreign Currency Translation
Section 31 – Hyperinflation
Section 32 – Events after the Reporting Period
Section 33 – Related Party Disclosures
Section 34 – Specialised Activities o Agriculture o Extractive industries o Service concession arrangements o Financial institutions o Retirement benefit plans o Heritage assets o Funding commitments o Incoming resources from non-exchange transactions o Public benefit entity combinations o Public benefit entity concession loans
Section 35 – Transition
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APPENDIX 4: SCOPE OF RELEVANT SECTIONS
Note that within the FRS these headings are not necessarily in the same order, and there are minor differences in the wording, hence their inclusion verbatim.
It is particularly important to note where a financial instrument if wholly exclude, where the exclusion applies only to the holder or issuer, or where the exclusion is otherwise limited.
Scoped out of section 11 Scoped out of section 12 Scoped out of section 22
Those covered by Section 11.
Investments in subsidiaries, associates and joint ventures that are accounted for in accordance with Section 9 Consolidated and Separate Financial Statements, Section 14 Investments in Associates or Section 15 Investments in Joint Ventures.
Investments in subsidiaries (see Section 9 Consolidated and Separate Financial Statements), associates (see Section 14 Investments in Associates) and joint ventures (see Section 15 Investments in Joint Ventures).
Investments in subsidiaries, associates and joint ventures that are accounted for in accordance with Section 9 Consolidated and Separate Financial Statements, Section 14 Investments in Associates or Section 15 Investments in Joint Ventures
Financial instruments that meet the definition of an entity's own equity and the equity component of compound financial instruments issued by the reporting entity that contain both a liability and an equity component (see Section 22 Liabilities and Equity).
Financial instruments that meet the definition of an entity's own equity and the equity component of compound financial instruments issued by the reporting entity that contain both a liability and an equity component (see Section 22 Liabilities and Equity).
Leases, to which Section 20 Leases applies. However, the derecognition requirements in paragraphs 11.33 to 11.35 and impairment accounting requirements in paragraphs 11.21 to 11.26 apply to derecognition and impairment of receivables recognised by a lessor and the derecognition requirements in paragraphs 11.36 to 11.38 apply to payables recognised by a lessee arising under a finance lease. Section 12 applies to leases with characteristics specified in paragraph 12.3(f).
Leases (see Section 20 Leases) unless the lease could, as a result of non-typical contractual terms, result in a loss to the lessor or the lessee
Employers' rights and obligations under employee benefit plans, to which Section 28 Employee Benefits applies, although paragraphs 11.27 to 11.32 do apply in determining the fair value of plan assets.
Employers' rights and obligations under employee benefit plans (see Section 28 Employee Benefits).
Employers' rights and obligations under employee benefit plans, to which Section 28 Employee Benefits applies.
Financial instruments, contracts and obligations to which Section 26 Share-based Payment applies, and contracts within the scope of paragraph 12.5.
Financial instruments, contracts and obligations to which Section 26 Share-based Payment applies, except for contracts within the scope of paragraph 12.5.
Financial instruments, contracts and obligations under share-based payment transactions to which Section 26 applies, except that paragraphs 22.3 to 22.6 shall be applied to treasury shares issued, purchased, sold, transferred or cancelled in connection with employee share option plans, employee share purchase plans, and all other share-based payment arrangements.
Insurance contracts (including reinsurance contracts) that the entity issues and reinsurance contracts that the entity holds (see FRS 103 Insurance Contracts). [see note 1]
Insurance contracts (including reinsurance contracts) that the entity issues and reinsurance contracts that the entity holds (see FRS 103 Insurance Contracts). [see note 1]
Insurance contracts (including reinsurance contracts) that an entity issues and reinsurance contracts that it holds (see FRS 103 Insurance Contracts). [see note 1]
Financial instruments issued by an entity Financial instruments issued by an entity Financial instruments with a discretionary
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with a discretionary participation feature (see FRS 103 Insurance Contracts). [see note 2]
with a discretionary participation feature (see FRS 103). [see note 2]
participation feature that an entity issues (see FRS 103). [see note 2]
Reimbursement assets accounted for in accordance with Section 21 Provisions and Contingencies.
Reimbursement assets accounted for in accordance with Section 21 Provisions and Contingencies.
Financial guarantee contracts (see Section 21).
Financial guarantee contracts (see Section 21).
Financial guarantee contracts (see Section 21 Provisions and Contingencies).
Contracts for contingent consideration in a business combination (see Section 19 Business Combinations and Goodwill). This exemption applies only to the acquirer
Contracts for contingent consideration in a business combination (see Section 19 Business Combinations and Goodwill). This exemption applies only to the acquirer.
Any forward contract between an acquirer and a selling shareholder to buy or sell an acquiree that will result in a business combination at a future acquisition date. The term of the forward contract should not exceed a reasonable period normally necessary to obtain any required approvals and to complete the transaction.
Note 1 Both the issuer and the holder are required to apply FRS 103 to such instruments
Note 2 The issuer, only of such instruments is required to apply FRS 102 to such instruments
Preparing for FRS 102 – the New UK GAAP
Transition Checklist and Appendices
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UK Training (Worldwide) Limited
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Formby L37 4AN
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