FRS 102, FRS 102 1A and FRS 105

FRS 102 is a single most recent coherent financial reporting standard replacing old UK GAAP (Generally Accepted Accounting Standards) applicable in the UK and the Republic of Ireland. Derived from the IFRS for SMEs, the Financial Reporting Council has made significant modifications to address company law requirements and incorporate additional accounting options

FRS 102 1A is a part of FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland.

FRS 102 1A is for small entities. The main features of FRS 102 1A is that fewer disclosures and primary statements are required compared to FRS 102, as only an income statement, balance sheet, and notes to the accounts should be reported.

FRS 105 is exclusively for the use of entities that qualify as a micro-entity and decide to apply the micro-entities regime. It’s a much simpler standard than FRS 102 and entities are only required to prepare an income statement and balance sheet, alongside limited disclosures.

An entity is a micro-entity if it meets at least two of the three following criteria:

• Turnover of £632,000 or less (adjusted for periods longer or shorter than 12 months)
• A balance sheet of £316,000 or less
• 10 employees or fewer

As a result, only the smallest of entities can qualify for the micro-entities regime.

FRS 102 1A and FRS 105 have been in effect in respect of accounting periods beginning on or after 1 January 2016.

You can view the March 2018 editions of the accounting standards, which incorporate the triennial review amendments, on the Financial Reporting Council’s website.

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