The Financial Reporting Standard for Smaller Entities (FRSSE) has existed since 1997 and the FRC have subsequently revised the FRSSE when there has been sufficient accounting developments to incorporate. The current applicable version of the FRSSE is the FRSSE (effective January 2015). This means that accounts produced under the CA 2006 regime for accounting periods commencing on or after 1 January 2015 will have to adopt the new acccounting requirements. This replaces the FRSSE (effective April 2008) and the key changes are as follows:
In the case that the directors are unable to make a reliable estimate of the useful life of goodwill or intangible fixed assets, the maximum life shall not exceed five years (reduced from 20 years).
The definitions in connection with related parties and key management personnel have been updated to align with FRS 102.
The directors are required to make an annual assessment of whether there are any indications of impairment of assets.
The exemption for disclosure of intra-group related party transactions where any subsidiary party to the transaction is 100% owned by the group has been added.
However, the changes above are due to be short lived as in July 2015 the FRC confirmed several changes to new UK GAAP. The FRSSE will be withdrawn from 1 January 2016 and be replaced with a new standard FRS 102. The changes are driven by changes in European Law and small entities will follow FRS 102 for recognition and measurement purposes. If your business qualifies as a Micro-Entity it will follow FRS 105.
The FRSSE (effective January 2015) is still avaliable for 2015 year ends and doesnt have significant changes in reporting to FRSSE (effective April 2008). For accounting periods commencing on or after 1 January 2016 you will see significant changes and key things will need understanding within your small company.
Please get in touch for further advice as we will be able to support you through the transitions required for your business.
Paul & Vanessa