Our Financial Reporting Expert Group contributed to our response to the FRC consultation - Triennial Review of UK and Ireland accounting standards - Approach to changes in IFRS.
We generally supported the FRC’s principles for developing succinct financial reporting standards for the UK and the Republic of Ireland. However, we encouraged the FRC should also wait until Post-Implementation Reviews are completed, after the adoption of a new standard by the IASB, to assess how it is working in practice, so that it can be better understood whether the changes are proportionate and cost effective, as well as whether the new standard better meets the needs of the principal objective.
We noted that this would mean that significant changes anticipated to be effective from 1 January 2022 should be delayed until 2025.
We supported the proposal not to amend FRS 102 following the issue of IFRS 12, as well as the proposal not to amend FRS 102 to incorporate any further disclosure requirements of IFRS 13.
Regarding the FRC's proposal to retain the option to choose IAS 39 until the requirements for the impairment of financial assets have been amended in FRS 102, we noted that the potential situation exists whereby an entity could elect to use IAS 39, even once it is no longer available as part of EU-adopted IFRS for accounting periods beginning before 1 January 2018.
We noted that removing the option from the date that IAS 39 ceases to exist in IFRS could result in a company that has taken that option potentially moving back to FRS 102 – an accounting policy it has already chosen to move away from – and continuing with the incurred loss model. With this in mind, we commented that the availability of IAS 39 under FRS 102 should reflect its availability under IFRS.
Click here to download our response (pdf)