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Auditing Standards

Author: Auditing Practices Board

Publisher: Bloomsbury Professional

Auditing Standards

Auditing Standards

The full text of all International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. Also includes Ethical Standards issued by the Auditing Practices Board.

© Financial Reporting Council Ltd (FRC). Adapted and reproduced with the kind permission of the Financial Reporting Council. All rights reserved. For further information, please visit www.frc.org.uk or call +44 (0)20 7492 2300.

Last update: October 2023

FRC issues update to the periodic review

On 29 September 2023, the Financial Reporting Council (FRC) issued a project update on its periodic review of UK and Ireland accounting standards.

FRED 82 Draft amendments to FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland and other FRSs – Periodic Review was published on 15 December 2022 and comments on this Exposure Draft closed on 30 April 2023.

Among other amendments, FRED 82 proposes significant changes in the areas of lease accounting (but not for FRS 105 The Financial Reporting Standard applicable to the Micro-entities Regime) and revenue recognition (for both FRS 102 and FRS 105). It is doubtful that the FRC will abandon these significant proposals and have confirmed in their project update that they are continuing work in these areas. Notably, for on-balance sheet lease accounting, the FRC are reconsidering how the model is proportionate and understandable for preparers of financial statements under FRS 102. For example, by perhaps clarifying the scope of the recognition exemption for leases of low-value assets.

In respect of the changes to revenue recognition and the introduction of a five-step model approach similar to that in IFRS® 15 Revenue from Contracts with Customers, the FRC have received support for the proposals. However, there is some concern about the proportionality of the amendments in FRS 105. In this respect, the FRC are continuing to work on the five-step model approach to revenue recognition in light of the feedback they have received and are seeking further simplifications to ensure the revenue recognition principles in FRS 105 remain proportionate.

Effective date

The FRC originally planned to require the amendments arising from the periodic review to be effective for periods commencing on or after 1 January 2025. This date has now been delayed so the amendments arising from the periodic review will not have an effective date before 1 January 2026. The FRC expect to publish the final amendments to FRS 102 and other FRSs in the suite of UK and Ireland GAAP in the first half of 2024.

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