Route 102 – One man’s year-long journey……Continued

  • By Jeremy Williams
  • 08/01/2015

To mark this momentous year for UK GAAP, I'm embarking on a mission to work my way through FRS 102, reading a portion on each working day of 2015 and writing a short blog entry on my thoughts and musings (be they few or many). It's now day four - hasn't this week flown by? Time to dive into section 3...

DAY FOUR (8 Jan)

Section 3 of FRS 102 is... tedious. It's also pretty obvious fare for any experienced accountant; the meaning of 'fair presentation' (the equivalent of the more familiar 'true and fair view'), the impact of going concern, the need to prepare accounts at least annually, consistency, comparatives...are you yawning yet? There's not much to get excited about.

The section starts getting a bit more interesting in para 17. Here it lists a 'complete set of financial statements'. Importantly, the standard allows an accounting policy choice of either a single statement of comprehensive income (the 'one-statement approach') or separate income and comprehensive income statements (the aptly named 'two-statement approach', more akin to a P&L and STRGL). Para 18 allows a single statement of income and retained earnings to be substituted where the only changes to equity arise from profit or loss, dividends and prior period adjustments - we'll cover this in more detail in a later blog post when we get to section 6.

Hate the thought of calling your beloved balance sheet a 'statement of financial performance'? Don't worry. Para 22 allows alternative titles for financial statements as long as they are not misleading.

The other bit of interest is 3.24 - this requires disclosure of the address of the registered or principal office and of the nature of the entity's operations and its principal activities (unless the latter is included in accompanying documents such as the Strategic Report). This is worth thinking about because, only relatively recently, this precise latter disclosure was removed from the statutory company directors' report. Reports of its death have been greatly exaggerated...

Get that Friday feeling with a look at section 4 tomorrow! At this rate, it's tempting to think we'll be done by the end of the month. Don't be fooled - there are quagmires ahead.

P.S. If you missed yesterday's instalment click here

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