FRS 101 ‘Reduced Disclosure Framework’ sets out the financial reporting requirements and disclosure exemptions available for use by subsidiaries and ultimate parent companies in their individual financial statements.
FRS 101 permits qualifying subsidiaries and ultimate parent companies to apply the recognition and measurement principles of IFRS in their individual financial statements. Applying FRS 101 may lead to a reduced number of consolidation adjustments necessary to produce the group accounts, and provides a welcome relief from some of the extensive disclosure requirements of IFRS at the entity specific level.
What is a qualifying entity?
A qualifying entity is a member of a group where the parent prepares publicly available consolidated financial statements which are intended to give a true and fair view and the qualifying entity must also be included in that consolidation.
FRS 101 may not be applied to consolidated accounts but may be applied to the individual accounts of a company which prepares consolidated accounts. Additional conditions need to be met before FRS 101 can be applied.
What disclosure exemptions are available?
FRS 101 provides a number of disclosure exemptions for qualifying entities, some of which are available automatically and some of which require equivalent disclosure by the parent entity in whose consolidated accounts the qualifying entity is included.
Recent changes affecting those reporting under FRS 101
- Amendments to FRS 101 -2016/17 cycle
- Company Law changes - amendment to FRS 101
- Changes to company law for medium/large entities applying UK GAAP
- Changes to company law for small entities applying UK GAAP
- Amendments to FRS 101 – 2015/16 cycle in July 2016
Current exposure drafts
- FRED 69 - proposes no amendments to FRS 101 in the 2017/2018 cycle
For more information please get in touch with Danielle Stewart.