Route 102 – One man’s year-long journey……Day 48

  • By Jeremy Williams
  • 14/04/2015

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).

Day 48 (14 Apr)

Yesterday, I noted some changes in the way FRS 102 deals with content for inventory (longer, but all in the standard) compared to SSAP 9 (only two paras, but lots of guidance).

Here's another observation - a benefit from the fact that FRS 102 is a single all-encompassing standard. Para 13.7 discusses deferred settlement terms and the interest element that this may entail - this is recognised as an expense over the deferral period unless the asset is qualifying for the purposes of borrowing cost capitalisation (to whit, see section 25). A nice example of the way in which FRS 102 does its best to be consistent across different areas.

Let's look at inventory disclosures. There are none (for short-term stocks, that is) within SSAP 9 - instead the standard requires that the company law classification is adopted. That said, you'd be expected to include the accounting policy note for stock under FRS 18.

Disclosure in FRS 102 (see 13.22) is fairly brief but a little more extensive. Notably, you need to disclose the amount of inventory recognised as an expense in the period, and the recognition or reversal of impairment losses (as set out in section 27). We'll return to this latter issue when we reach section 27, but the latter is more wide-ranging than the equivalent FRS 11, which focuses on impairment of fixed assets and goodwill and does not include stock in its scope.

I'm off to glorious Yorkshire for a course this afternoon. Section 14 begins tomorrow...

P.S. If you missed the last instalment click here

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