Financial Reporting News

Financial Reporting News

FRED 82 Draft amendments to FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland and other FRSs – Periodic Review
FRED 82 proposes a number of changes resulting from the second periodic review of FRS 102 and other Financial Reporting Standards. The proposals include: a new model of revenue recognition in FRS 102 and FRS 105; a new model of lease accounting in FRS 102; and various other incremental improvements and clarifications. The FRED is accompanied by a consultation stage impact assessment.

In developing FRED 82, the FRC has considered changes to IFRS Accounting Standards, the IASB’s proposed changes in developing the third edition of the IFRS for SMEs Accounting Standard, stakeholder feedback in response to the FRC’s 2021 request for views, and other developments in corporate reporting.

As a result of the amendments set out in FRED 82, FRS 102 will reflect up-to-date IFRS-based solutions, providing high-quality and clear financial reporting to users. This will include more transparent reporting of lease obligations, as well as a clear five-step model for determining the recognition of revenue from all contracts with customers. The proposals have been designed to be proportionate to the size and complexity of the entities applying the standards.

The proposed effective date of the amendments set out in the FRED is 1 January 2025.

Comments were invited in writing on all aspects of the draft amendments, including the consultation stage impact assessment, by 30 April 2023.

CPA Ireland’s response to FRED 82 can be found:

FRED 83 Draft amendments to FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland and FRS 101 Reduced Disclosure Framework – Pillar Two model rules
The OECD’s Pillar Two model rules introduce a global system of interlocking top-up taxes that aim to ensure that large multinational groups pay a minimum amount of income tax.

FRED 83 is based on similar proposals issued by the IASB. To make similar accounting relief and disclosure requirements available in the FRC’s financial reporting standards to a consistent timeframe the FRC in consulting now, rather than waiting for the IASB’s final amendments. However, the FRC intends to consider the IASB’s final amendments when finalising its own proposals.

The FRC proposes to introduce a temporary exception to the accounting for deferred taxes arising from the implementation of the Pillar Two model rules, alongside targeted disclosure requirements.

Deadline for comments on FRED 83 was 24 May 2023. CPA Ireland’s response to FRED can be found here:

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