The amendments are largely caused by changes to International Financial Reporting Standards (IFRS) accounting standards as a result of new requirements in the recently released “IFRS 18 Presentation and Disclosure in Financial Statements” and in it the FRC has been very clear that FRS 101 cannot be used in conjunction with the new “IFRS 19 Subsidiaries without Public Accountability: Disclosures” standard.

 

Per the FRC:-

‘FRS 101 is designed to be applied to the disclosure requirements of full IFRS accounting standards, not to the reduced disclosure requirements set out in IFRS 19. The FRC expects that the unambiguous statement to that effect in FRS 101 will save qualifying entities the cost of considering this issue,’

 

Re the amendments made the FRC say “The FRC expects that ‘entities will find that the core concepts and many disclosure requirements currently in IAS 1 are transferred to IFRS 18 without substantive modification, and entities that continue to present primary financial statements following the Companies Act formats will be less affected than those choosing to apply adapted formats’.

 

And that by adopting the amended FRS 101 (rather than doing IFRS accounts under the entirety of IFRS 18 that  ‘qualifying entities will largely avoid the costs they would otherwise have incurred in applying the new disclosure requirements of IFRS 18’.

 

The key amendments to FRS 101 include:

(a) maintain extant exemptions from disclosure requirements in IAS 1 Presentation of Financial Statements that have been transferred to the new standard IFRS 18 or other IFRS;

(b) exempt all qualifying entities from considering whether they have, and disclosing information about, management-defined performance measures (MPM);

(c) exempt a qualifying entity from providing detailed quantitative analysis about the nature of expenses classified by function in the statement of profit and loss; and

(d) prevent a qualifying entity which applies FRS 101 from applying IFRS 19.

 

The extant exemption (except for financial institutions) from the requirements of IFRS 7 Financial Instruments: Disclosures, provided that equivalent disclosures are included in the consolidated financial statements of the group.

 

The application of IFRS 18, if it is adopted in the UK by the FRC, would come into effect for accounting periods beginning on or after 1 January 2027.

 

FRS 101 Reduced Disclosure Framework [ Issued 28 May 2025]

 

Under IFRS 19 an eligible subsidiary can apply the recognition, measurement and presentation requirements in IFRS, along with a reduced set of disclosure requirements, enabling more cost-effective and streamlined reporting within groups. Company law allows an entity to move between adopted IFRS and FRSs in certain circumstances.