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UK GAAP: Notifying shareholders about FRS 101

12 September 2016

The Financial Reporting Council (FRC) is currently consulting on removing the requirement for a qualifying entity to notify its shareholders in writing that it intends to take advantage of disclosure exemptions in FRS 101 Reduced Disclosure Framework. A similar, consequential, amendment is also proposed to FRS 102 The Financial Reporting Standard applicable in the UK and RoI, to remove the requirement for a qualifying entity to notify its shareholders about the proposed use of disclosure exemptions.

The amendment has been proposed in response to concerns raised with the FRC that the cost-effectiveness of the requirement could be improved, as well as the guidance provided to ensure consistent application. Entities will still be required to explain in their financial statements which disclosure exemptions they have taken advantage of.

Details of the current requirement are set out in our previous Business Edge article ‘Have you told your shareholders about New UK GAAP’.

The consultation on this amendment, FRED 65 Draft amendments to FRS 101 Reduced Disclosure Framework - Notification of shareholders, will close on 14 October 2016 and it is proposed that the amendments will be effective for periods beginning on or after 1 January 2016.

At the same time, the FRC issued some limited Amendments to FRS 101 – 2015/16 cycle – these predominately provide exemptions from many of the disclosure requirements of IFRS 15 Revenue from Contracts with Customers for qualifying entities adopting FRS 101.

For further information on this issue please contact Richard Matthews.

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