This publication provides a high-level overview of the significant differences between ‘old’ UK GAAP, new UK GAAP (which, for the purposes of this publication, means FRS 102, ‘The financial reporting standard applicable in the UK and Republic of Ireland’) and EU-adopted IFRS (‘IFRS’). It focuses on a selection of those differences most commonly found in practice.
‘Old UK GAAP’ refers to the SSAPs, FRSs and UITF Abstracts in existence at March 2013, when FRS 102 was issued, which are superseded by FRS 102 when it is applicable.
‘New UK GAAP’ refers to the version of FRS 102 applicable for accounting periods beginning on or after 1 January 2015. This comprises the original version issued in March 2013, together with amendments for:
- Basic financial instruments and hedge accounting (issued July 2014).
- Pension obligations (issued February 2015).
- Share-based payment transactions with cash alternatives (included in the amendments issued in July 2015).
In addition, this publication includes details of the amendments issued by the Financial Reporting Council (FRC) in July 2015, to ensure consistency with the changes in company law resulting from the EU Accounting Directive, that apply for accounting periods beginning on or after 1 January 2016.
When applying the individual accounting frameworks, companies should consult all of the relevant accounting standards and, where applicable, the relevant legislation.
Where this publication states ‘Same as old UK GAAP’ or ‘Same as IFRS’, this means that the guidance is identical to old UK GAAP or IFRS, although the standards might use different terminology or wording. Where it states ‘Similar’, this means that the guidance is not identical and there are minor differences.
Qualifying entities applying the recognition and measurement rules of IFRS may be exempt from certain disclosures if they apply the reduced disclosure framework in FRS 101, ‘Reduced disclosure framework’. In this case, there are some changes that are required to the IASB’s texts in order to ensure compliance with the Companies Act 2006. Where such a change is applicable, details are included in the relevant sections in the IFRS column below. There are equivalent disclosure exemptions in FRS 102.
Abbreviations used include:
- FRS application guidance – the FRC’s new framework, FRS 100, ‘Application of financial reporting requirements’;
- New UK GAAP – for the purposes of this publication, this means FRS 102, ‘The financial reporting standard applicable in the UK and Republic of Ireland’, which is based on the IFRS for SMEs but amended to permit some previous accounting treatments in old UK GAAP and to comply with the Companies Act 2006; and
- RDF (IFRS) – EU-adopted IFRS as amended to comply with the Companies Act 2006 and reduced-disclosure framework, available for qualifying subsidiaries and parents as set out in FRS 101, ‘Reduced disclosure framework’.
While every effort has been made to ensure accuracy, information contained in this publication may not be comprehensive or information may have been omitted that may be relevant to a particular reader. In particular, this publication is not intended as a study of all aspects of old UK GAAP, new UK GAAP or IFRS, or as a substitute for reading the standards and interpretations when dealing with specific issues. No responsibility for loss to any person acting or refraining from acting as a result of any material in this publication can be accepted by PricewaterhouseCoopers. Readers should not act on the basis of this publication without seeking professional advice.