The Financial Reporting Council (“FRC”) has issued two new factsheets to support entities applying FRS 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ and their Press Release includes:
“These factsheets provide entities with additional clarity when applying specific elements of accounting standards. The new factsheets focus on the following areas:
- FRS Factsheet 12 ‘Presentation of the financial statements’ sets out the options available to entities applying FRS 102 (including small entities) for presenting the financial statements, particularly in relation to the ‘statutory’ and ‘adapted’ formats for the balance sheet and the profit and loss account; and
- FRS Factsheet 13 ‘The Going Concern Basis of Accounting for Small Companies and Micro-entities’ will support directors of small companies and micro-entities as they perform their going concern assessments and disclose their conclusions, including how these conclusions were reached.
When relevant, these factsheets also provide considerations for entities applying FRS 101 ‘Reduced Disclosure Framework’ or FRS 105 ‘The Financial Reporting Standard applicable to the Micro‑entities Regime’.
Factsheet 12 is of relevance to the FRC’s ongoing consultation on FRED 87 ‘Draft amendments to FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland – Adapted formats’, which proposes amendments to maintain the existing level of alignment to IFRS Accounting Standards when applying the adapted formats. Stakeholders are invited to comment on the proposed amendments until 10 October 2025.
Factsheet 13 relates to the FRC’s recently published ‘Guidance on the Going Concern Basis of Accounting and Related Reporting, including Solvency and Liquidity Risks’, which serves as a proportionate and practical guide for companies of different sizes to prepare high-quality, company-specific disclosures about their going concern conclusions.”
In addition, the FRC has clarified requirements regarding the disclosure of directors’ remuneration for small companies by including the following on their website:
“For accounting periods beginning on or after 1 January 2026, FRS 102 requires (in paragraph 1AC.35) a UK small entity to provide disclosure about related party transactions by applying paragraphs 33.9 and 33.14, but not paragraph 33.7 (which requires disclosure of key management personnel compensation).
Paragraphs 33.7 and 33.9 are intended to be complementary, not duplicative. Accordingly, there is no explicit requirement in FRS 102 for a UK small entity to disclose directors’ remuneration. However:
- Directors’ remuneration not concluded under normal market conditions would require disclosure by law (paragraph 66 of Schedule 1 to The Small Companies and Groups (Accounts and Directors’ Report) Regulations 2008 (SI 2008/409));
- Section 393 of the Companies Act 2006 requires the financial statements of a company to give a true and fair view. In order to comply, a small entity may need to provide disclosures in addition to those explicitly required by FRS 102. This could in principle apply to directors’ remuneration; judgement may be required; and
- Transactions with directors that fall outside the definition of key management personnel compensation, and therefore outside the scope of paragraph 33.7, are expected to require disclosure under paragraph 33.9.”
