FRS 102

Question 1

Property, plant and equipment (2)

Answer 1

• Borrowing costs are not always capitalised

- Certain disclosures around the revaluation surplus and changes in depreciation are not required

Question 2

NCA - Investment property (2)

Answer 2

• Assumption that the fair value method is used, if FV cannot be measured, use cost and deal with as part of PPE
• If entity rents property to another group entity, it’s accounted for either as I.P at fair value or by transferring property to PPE and applying cost model

Question 3

NCA - Held for sale

Answer 3

No requirement to classify assets as held for sale

Question 4

NCA - Leases

Answer 4

Number of differences. Asset and liability must be recognised for finance leases but not operating leases

Question 5

NCA - Impairment

Answer 5

No fundamental differences

Question 6

Inventories

Answer 6

No significant differences

Question 7

Revenue from contracts with customers (5)

Answer 7

• Separate models for: sale of goods/ rendering of services/ construction contracts/ interest royalties and dividends
• Revenue measured at FV of consideration received/ receivable
• Revenue is discounted to PV if value of consideration is deferred
• No guidance on issues eg variable consideration
• Revenue recognised when risks and rewards are transferred

Question 8

Accounting policies and estimates

Answer 8

No material differences

Question 9

Discontinued operations (4)

Answer 9

• No specific section under FRS 102
• Consistent with IAS1
• Line by line analysis of amount in income statement
• Comparatives presented on same basis

Question 10

Events after the reporting period

Answer 10

No significant differences

Question 11

Provisions, contingent assets and contingent liabilities

Answer 11

No fundamental differences

Question 12

NCA - Intangible assets (2)

Answer 12

• Development costs meeting FRS 102 criteria MAY be capitalised
• All intangible assets assumed to have finite useful life . When unknown, max of 10 years is used. Therefore Goodwill is amortised.

Question 13

Financial instruments: presentation, classification and measurement (3)

Answer 13

• Fewer classifications for financial assets under FRS 102 > no FVTOCI category
• Classifications for financial liabilities is the same
• Requires that financial assets/ liabilities are measured at FVTPL unless FV cannot be measured reliably, then cost less impairment is used

Question 14

Financial instruments: recognition

Answer 14

No differences

Question 15

Consolidation: changes in ownership

Answer 15

Cost of combination = total consideration given at date of each acquisition of shares with no remeasurement

Question 16

Consolidation: foreign currency

Answer 16

No differences

Question 17

Consolidation: associates and JVs

Answer 17

Both require use of the equity accounting method

Question 18

Consolidation: accounting requirements

Answer 18

FRS 102 > a subsidiary must be excluded from consolidation if it is acquired exclusively with a view to subsequent resale
IFRS > subsidiary may only be excluded from consolidation if it is not material

Question 19

Disclosure: related parties

Answer 19

Does not require disclosure of transactions entered into between two or more members of a group provided that any subsidiary party to the transaction is wholly owned.

Question 20

Current tax

Answer 20

No significant differences

Question 21

Share based payments

Answer 21

No fundamental differences

Question 22

Employee benefits

Answer 22

Disclosure requirements less extensive under FRS 102 but broadly in line

Question 23

Operating segments

Answer 23

Entities should refer to IFRS 8, no guidance provided

Question 24

Statement of cash flows

Answer 24

Requires most companies to prepare a statement of cash flows and takes a similar approach to IAS 7.