Impact of new FRS on tax

HMRC have published two overview papers covering FRS 101 and FRS 102 to assist companies with the adoption of New UK GAAP say Harris & Co accountants Northampton

The New UK GAAP standards have an effective date of accounting periods beginning on or after the 1st January 2015, but early adoption is available, subject to certain limitations. It is expected that many entities currently applying Current UK GAAP will transition to either FRS 101 ‘Reduced Disclosure Framework’ or FRS 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’.

The papers, which reflect HMRC’s thinking based on the law as at the date of publication, provide an overview of the key accounting changes and tax considerations that arise for companies that transition from Current UK GAAP to either FRS 101 or FRS 102. Although they compare the current and new regimes, and cover transitional adjustments from a Corporation Tax position, they may also assist individuals (and other entities) that are within the charge to income tax as many of the accounting and tax issues will be similar.

HMRC will update these papers as further information is available and as new accounting standards and tax law develop.