A qualifying entity is defined in FRS 101 as:
A member of a group where the parent of that group prepares publicly available consolidated financial statements which are intended to give a true and fair view (of the assets, liabilities, financial position and profit or loss) and that member is included in the consolidation.
A charity may not be a qualifying entity.
However, a qualifying entity which is required to, or voluntarily chooses to, prepare consolidated financial statements may not apply FRS 101 in its consolidated financial statements.
This does not prevent a qualifying entity which prepares consolidated accounts from applying FRS 101 in its individual financial statements and another reporting framework (eg EU-adopted IFRS) to its consolidated financial statements.
Disclosure exemptions
In order to apply the disclosure exemptions of FRS 101, a qualifying entity must also comply with the following requirements:
- Adopt the recognition, measurement and disclosure requirements of EU-adopted IFRS but make amendments where necessary in order to comply with the Companies Act and company regulations.
- Disclose:
- a summary of the disclosure exemptions taken; and
- the name of the parent of the group in whose consolidated financial statements the financial statements of the entity are included, and where these may be obtained.
- For periods beginning before 1 January 2016 only, notify shareholders and ensure objection has not been received from:
- the immediate parent;
- a shareholder with 5 per cent or more of the shares; and
- a shareholder with more than 50 per cent of the shares not held by the immediate parent.
Please note that while an entity may meet the definition of a qualifying entity and may therefore apply FRS 101 to its individual financial statements, some of the disclosure exemptions may only be taken when other conditions are satisfied.
For more information please contact Paul Merris.
