Part 8- Transition to FRS 102

FRS 102 becomes mandatory for accounting periods commencing on or after 1 January 2015 (early adoption is also permitted). However, there is also a requirement that the opening balance sheet is retrospectively applied so that FRS 102 is fully implemented. This means that the transition date for a company with a December year end will be 1 January 2014 (being the first day of the comparative year end). On transition, FRS 102 requires the user to apply the following rules; (a) Recognise all assets and liabilities whose recognition is required by the FRS; (b) Not recognise items as assets or liabilities if the FRS does not permit such recognition; (c) Reclassify items that it recognised under its previous financial reporting framework as one type of asset, liability or component of equity, but are a different type of asset, liability or component of equity under the FRS; and (d) Apply the FRS in measuring all recognised assets and liabilities. Companies should be aware of the effects that FRS 102 may have on their business, their profits and their balance sheet. Depending on their circumstances, the effects can range from minimal to substantial and advice should be sought on the potential effects of the change in framework.

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