THERE have been relatively few changes to UK GAAP (Generally Accepted Accounting Principles) for a number of years. But all that has changed now with the introduction of FRS100, FRS101 and FRS102.

These new standards set out how Financial Statements must be prepared going forward and are effective for accounting periods beginning on or after January 1, 2015.

Thus, reporting for all UK companies has been fundamentally modernised.

The reason for the change is to align UK standards with those international standards used by listed companies, and produce information that is proportionate to the needs of the preparers and users.

In the new FRS, income encompasses both revenue and gains. This is a fundamental change and is demonstrated through the treatment of unrealised gains on investment properties.

Previously these gains were shown in the Statement of Total Recognised Gains and Losses (STRGL) and excluded from distributable reserves, but the new standard values these assets at fair value, and gains arising are taken directly to the profit and loss account, although remain non-distributable for dividend purposes.

Other key changes and treatments cover intangible assets such as goodwill, property, leases and the inclusion of holiday pay accruals within the current period.

The largest change may impact on the agricultural/horticultural sector with biological assets being measured at fair value less costs to sell.

There is increased transparency surrounding related party disclosures, and merger accounting is no longer allowable. The appearance and presentation of the Full Statutory Accounts changes too.

With all these changes ahead it is essential you seek proactive advice from advisors to understand the impact this will have on individual entities.

Feel free to contact me at JWP Creers on 01904 717260.