FRS 102 – what clients need to know

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Many accountants will probably be wondering how they broach the potentially sleep-inducing subject of implementing new accounting rules with their clients.

Potentially this is the single biggest change to accounting rules ever. Why? Mainly because it affects all entities that are not listed (i.e. around 99% of companies) and many will, for the first time, have to account for financial instruments using ‘fair value’ and ‘amortised cost’ measurement rules. In a recent UK survey, it was estimated that the conversion process could take between 5 to 7 hours per client!! So the importance of having meetings with clients to discuss this topic and the cost implications cannot be underestimated. In order to help assist you with these meetings, we have prepared an FRS 102 ‘toolkit’ that contains three elements.

Below is an extract from a draft letter to clients that we have prepared for accounting firms. It comes free of charge in a bundle with our ‘FRS 102 Transition Checklist’ (retailing for €60+VAT or £48 (no VAT, if UK VAT number quoted) and along with our other free publication ‘Most Common Potential Differences Between FRS 102 and old Irish/UK GAAP’. Orders to john@jmcc.ie

Here is the beginning of the letter:

‘Dear Client

We have an ongoing dedication to keeping our clients abreast of the latest changes in the business arena. You may have heard of recent changes announced to the accounting rules for companies in Ireland and the UK called ‘FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland’.

FRS 102 is a single accounting standard that replaces existing Irish Generally Accepted Accounting Practice (Irish GAAP) for private companies and non-profit entities (and certain other entities) for accounting periods that commence on or after 1 January 2015.

This change means that for accounting periods ended 31 December 2015 and later, you will notice differences in measurement and presentation of certain items in your financial statements. Also some of the 2014 comparative items (already reported under the ‘old’ rules) will need to be re-presented in order to comply with the new rules.

Changes to the numbers

Your organisation will need to be prepared for the changes arising on first implementation of FRS 102 because:

·         reported profits could change;

·         the balance sheet could be significantly affected, and

·         the financial statements will look different.’

 

End of extract from sample letter.

 

 The draft letter is free of charge, in a bundle with our:

·         ‘FRS 102 Transition Checklist’  and

·         along with our other free publication ‘Most Common Potential Differences Between FRS 102 and old Irish/UK GAAP’.

 

All the above for €60+VAT or £48 (no VAT, if UK VAT number quoted)

 

Sample contents pages for the ‘FRS 102 Transition Checklist’ and the ‘Most Common Potential Differences Between FRS 102 and old Irish/UK GAAP’ are available to view before you decide to purchase on our website at www.jmcc.ie

 

 

Orders with e-mail address for electronic delivery to john@jmcc.ie