Route 102 – One man’s year-long journey……Day 16

  • By Mercia Group
  • 26 January 2015 00:00

To mark this momentous year for UK GAAP, I'm embarking on a mission to work my way through FRS 102, reading a portion on each working day of 2015 and writing a short blog entry on my thoughts and musings (be they few or many).

It's a shiny new week and we break into double figures...

DAY 16 (26 Jan)

Section 10 is (compared to section 9) like a bit of fresh air, in my view. It's broadly the equivalent of FRS 18, which in turn was the replacement for dear old SSAP 2 (and which of us didn't shed a quiet, simple tear when that standard was put out to seed?). Section 10 is thus concerned with accounting policies, something which is a bigger deal for FRS 102 than previously (and as a result will probably lead to longer disclosure).

There's only one bit of the first page of section 10 that really catches my eye, and it's a descending hierarchy (now I've got a bizarre mental image of kings and queens of yore drifting slowly downwards - that would be a descending monarchy. I may need to get my inner ear checked again.) Essentially, it's a set formula for dealing with silences within FRS 102 - where should the confused accountant turn? Sensibly enough, the correct pecking order is:

  • Another FRS (if there is one, of course. Now that FRS 102 is meant to be almost all-encompassing, this is a faint hope)
  • A Statement of Recommended Practice (SORP).
  • One's judgement, based on the general principles within section 2 of FRS 102.
  • (If still stuck), there's always the IFRSs (which are often brimming with guidance and examples) to consider. (There's a quick reminder that some poor souls already have to apply IAS 33, IFRS 8 and/or IFRS 6).
  • There. That's broken us in fairly gently. More tomorrow.

    P.S. If you missed Friday's instalment click here

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