Summary of key differences

Publication date: 16 Oct 2015

Summary of key differences between old UK GAAP, new UK GAAP (FRS 102) and IFRS

The summary below highlights the key differences between old UK GAAP, new UK GAAP (that is, FRS 102) and IFRS.

The summary reflects the amendments to FRS 102 published in July 2015.

Subject Old UK GAAP vs New UK GAAP (FRS 102)Old UK GAAP vs IFRS IFRS vs New UK GAAP (FRS 102)
Financial statements presentation 2Company law formats apply for both, but a change in law and an amendment to FRS 102 means formats based on IFRS can be used under new UK GAAP.2Companies Act formats differ from IAS 1 formats.2IAS 1 formats differ from detailed company law formats used in FRS 102 (but under the amended FRS 102, there is also an option to use formats based on IFRS).
Cash flow statements3Cash vs Cash and cash equivalents. Also, FRS 102 has fewer headings.3Cash vs Cash and cash equivalents. Also, IFRS has fewer headings.1Both prepared for cash and cash equivalents. Similar headings.
Financial assets and liabilities:
− FRS 4 model
3 Fair values (for example, for derivatives) not used under FRS 4.3Fair values not used under FRS 4. IAS 39 has detailed rules.n/a 
− FRS 26/IAS 39 model2 Measurement of financial assets may differ as no fair value through ‘OCI’ category under new UK GAAP. Also, different rules for hedge accounting.1FRS 26 is based on IAS 39.2Measurement of financial assets may differ as no fair value through ‘OCI’ category under new UK GAAP. Also, different rules for hedge accounting.
Foreign currency (SSAP 20)2Contracted rates can be used under SSAP 20. More flexible hedging of investments in entity accounts under SSAP 202Contracted rates can be used under SSAP 20. More flexible hedging of investments in entity accounts under SSAP 20. CTA recycling under IFRS.n/a 
Foreign currency (FRS 23) 2 No recycling of CTA under new UK GAAP.1FRS 23 is based on IAS 21. 2No recycling of CTA under new UK GAAP
Hyperinflation1 1FRS 24 is based on IAS 29. UITF 9 permitted a choice of methods.1 
Revenue recognition1 1 1 
Government grants2 Policy choice (accruals/ performance model) under FRS 102. Old UK GAAP uses accruals model.1Both use the accruals model.2 Policy choice (accruals/performance model) under FRS 102. IFRS uses accrual model.
Capitalisation of borrowing costs2Policy choice under FRS 102.1Capitalisation required under both.2Policy choice under FRS 102.
Retirement benefits2Net interest cost approach and group schemes differ.2Net interest cost approach and group schemes differ.1 FRS 102 is similar to IAS 19.
Other employee benefits3No standard under old UK GAAP.3No standard under old UK GAAP.1FRS 102 is similar to IAS 19.
Share-based payment transactions2Option pricing models not always applied under FRS 102. Also, arrangements where the counterparty has a choice of settlement are treated differently. 1FRS 20 is based on IFRS 2.2Option pricing models not always applied under FRS 102. Also, arrangements where the counterparty has a choice of settlement are treated differently.
Income taxes
– Current
1 1 1 
– Deferred 3 More deferred tax under FRS 102 ‘timing differences plus’ approach. Unlike old GAAP there are no exceptions for revaluations, rollover and unremitted earnings A temporary difference approach is applied for business combinations.3 Timing difference with exceptions vs temporary difference approaches.2 Timing difference ‘plus’ vs temporary difference approaches although in many cases the resulting deferred tax from the different approaches will be the same.
Intangible assets other than goodwill2More intangibles under FRS 102 and no indefinite life.2More intangibles under IFRS.2IFRS can have indefinite-lived intangibles.
Property, plant and equipment1 1 1 
Investment property2 Fair value movement in statement of total recognised gains and losses (old UK GAAP) vs profit or loss (FRS 102).2 Fair value movement in statement of total recognised gains and losses (old UK GAAP) vs profit or loss (IFRS).1Fair value movement in profit or loss for both.
Impairment of non-financial assets2 Annual impairment testing required for some goodwill and intangibles under old UK GAAP. Reversals of goodwill impairments will be prohibited under FRS 102. 2Allocation and reversal of impairment losses differ. 1 Same, when the July 2015 amendment to FRS 101 prohibiting reversal of impairment of goodwill applies.
Leases2Guidance more detailed in old UK GAAP. No 90% test in FRS 102.2Different methods for lessor accounting. Guidance more detailed in old UK GAAP. No 90% test in IFRS.1 
Inventories1 1 1 
Provisions and contingencies1 1 1 
Events after the reporting period1 1FRS 21 is based on IAS 10.1 
Consolidation2Subsidiaries held in investment portfolios are not consolidated under FRS 102. 2No remeasurement of pre-existing or retained stakes under old UK GAAP. Investment entities are not consolidated under IFRS.2No remeasurement of pre-existing or retained stakes under FRS 102.
Business combinations (including goodwill)2Goodwill has to be amortised under FRS 102. Useful life is no longer ‘presumed’ to be 20 years (as it was under old UK GAAP). 2Goodwill is not amortised under IFRS. Accounting for transaction costs and contingent consideration differs under IFRS.2Goodwill is not amortised under IFRS. Accounting for transaction costs and contingent consideration differs under IFRS.
Discontinued operations and assets held for sale2Different definitions for discontinued operations. No concept of assets held for sale in either GAAP.3FRS 3 differs from IFRS 5. 3FRS 102 does not deal with assets held for sale.
Investments in associates1 1 1 
Investments in joint ventures (IFRS 11)1 1 1  
Related-party transactions1Similar definitions and disclosures.1Similar definitions and disclosures.1Similar definitions and disclosures.
Specialised activities (agriculture)2Cost or fair value policy choice under FRS 102. No specific guidance under old UK GAAP.3No fair value standard under old UK GAAP.2Cost or fair value policy choice under FRS 102. IFRS requires fair values.
Service concession arrangements3FRS 102 includes an intangible asset model for operators.3Old UK GAAP covers accounting by grantors. IFRS includes an intangible asset model for operators.2FRS 102 covers accounting by grantors.

 

Key:

1 Same or minor differences
2 Some differences
3 Significant differences
 
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