Is this the future of accounting for small entities in the UK?
The FRC have amended the current FRSSE 2008 for what they call "consequential amendments" as a result of publishing FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland". FRSSE 2015 will be mandatory for periods beginning 1 January 2015 onwards although early adoption is allowed.
BUT don't get too excited looking for dramatic changes in the new FRSSE because you will not find much more than:
- if an entity is unable to make a reliable estimate of the useful life of goodwill, the life shall not exceed five years. Under the current FRSSE, the life cannot exceed 20 years;
- each year an assessment is required as to whether there is any indication that a fixed asset should be written down; and
- a widening of the definition of Related Parties using similar wording to FRS 8 (although it remains only those material to the reporting entity which must be disclosed).
AND of course the biggest changes we are expecting for small entities are those due to the revised EU Accounting Directive and changes available to micro-entities, neither of which are contained in FRSSE 2015.
We are expecting a BIS Consultation in the near future. That consultation will lead to potentially dramatic changes in the contents of small company accounts, and indeed is likely to increase the number of small companies and those which can claim audit exemption! Watch this space!!!!
FRSSE 2015 can be found here.