Ireland’s accounting standards are subject to periodic reviews, at least every five years, to ensure they remain up-to-date and continue to require high-quality and cost-effective financial reporting from entities within their scope. The FRC is starting the next periodic review of FRS 102 (and other UK and Ireland accounting standards. Through this process , the FRC is seeking views from stakeholders on areas that might be considered as part of the review.
This might include new issues/transactions that should be addressed, or comments or suggestions in relation to the current requirements. In addition to stakeholder feedback the review will consider recent developments in financial reporting (such as changes in IFRS) and relevant developments in the wider reporting framework, for example, IFRS 16
Leases provides a single lessee accounting model that requires assets and liabilities arising from almost all lease arrangements to be recognised on the balance sheet. One might view that bringing leases onto the balance sheet under FRS 102 is the right approach as many companies reporting under FRS 102, including small entities, have complex lease arrangements and that the principles of IFRS 16 would provide better information to preparers and users. Nevertheless, those that might take this view should urge the FRC to develop a simplified approach to avoid introducing all the complexities of IFRS 16 into FRS 102. In contrast, one might take the view that bringing all leases onto the balance sheet may be particularly challenging for very small entities, particularly owner-managed businesses, and may have limited benefits.
Any changes to accounting standards that are proposed as a result of the periodic review will be subject to public consultation at a later date, not expected to be before 2022. The effective date for any amendments is currently expected to be 1 January 2024.The FRC also expects to hold roundtable events for stakeholders to provide their views. Further details will be provided in due course.
To ascertain your views on areas in which the existing standards are not operating well and on developments in other areas such as IFRS that could be incorporated in UK & Ireland GAAP. The Institute would particularly welcome the views of our practitioners on this open response in advance of the last date for comment to the FRC– 31 October 2021. Should you which to provide comments on any aspect of the standards please submit them to Cath Matthews ,
cmatthews@cpaireland.ie by 25 October 2021.