ICAEW.com works better with JavaScript enabled.

ICAEW submits final views on FRED 82

Author: ICAEW Insights

Published: 02 May 2023

ICAEW is broadly supportive of the draft amendments to UK GAAP standards set out in FRED 82, but raises issues that the Financial Reporting Council (FRC) should consider before finalising changes to FRS 102 and other FRSs.

The FRC’s draft amendments to UK GAAP, published in FRED 82 Draft amendments to FRS 102 The Financial Reporting Standards applicable in the UK and Republic of Ireland and Other FRSs, propose significant changes to the approach to revenue recognition and accounting for leases as well as other amendments.

The FRC needs to ensure that the suite of UK GAAP standards is up to date and reflects the latest developments in international financial reporting standards (IFRS) as appropriate for their users. In ICAEW’s view, the proposed amendments generally meet that need effectively.

ICAEW’s initial views of the proposals have now been finalised and submitted to the FRC. In its response to the FRED 82 consultation, ICAEW expresses broad support for the amendments, while highlighting areas for further consideration. This includes ways in which the FRC could further shorten and simplify the new lease accounting section and some points of detail regarding the new revenue section of FRS 102.

ICAEW also believes the FRC should reconsider all proposed changes to FRS 103 Insurance Contracts and proposals to change the revenue recognition model in FRS 105 The Financial Reporting Standard applicable to the Micro-entities Regime.

The proposed effective date for the amendments set out in FRED 82 is accounting periods beginning on or after 1 January 2025. Early adoption will be permitted provided all amendments are applied at the same time. ICAEW’s response sets out a number of factors the FRC should consider before finalising the effective date.

The deadline to submit comments on FRED 82 to the FRC has now passed. The FRC will start to consider all the consultation responses received and aims to finalise and issue the amended standards by the end of 2023. No matter what is decided regarding the effective date, entities will be given no less than 12 months between the final amendments being issued and the date of implementation.

Laura Woods, Technical Manager in ICAEW’s Corporate Reporting Faculty, says: “The FRC has done an excellent job of updating and improving the suite of UK GAAP standards in a way that balances the need for consistency with international standards, with the need for appropriate proportionality. We look forward to seeing the final standards published in due course.” 

Read ICAEW’s full response to FRED 82.

Periodic review of UK GAAP

View the Corporate Reporting Faculty’s hub page on the Periodic review of UK GAAP to keep abreast of the latest developments.

Accounting

Discover more from ICAEW Insights

Insights showcases news, opinion, analysis, interviews and features on the profession with a focus on the key issues affecting accountancy and the world of business.

Podcasts
Accountancy Insights Podcast
Accountancy Insights Podcast

Hear a panel of guests dissect the latest headlines and provide expert analysis on the top stories from across the world of business, finance and accountancy.

Find out more
Daily summaries
Three yellow pins planted into a surface in a row
News in brief

Read ICAEW's daily summary of accountancy news from across the mainstream media and broader financing sector.

See more
Newsletter
A megaphone
Stay up to date

You can receive email update from ICAEW insights either daily, weekly or monthly, subscribe to whichever works for you.

Sign up
Open AddCPD icon

Add Verified CPD Activity

Introducing AddCPD, a new way to record your CPD activities!

Log in to start using the AddCPD tool. Available only to ICAEW members.

Add this page to your CPD activity

Step 1 of 3
Download recorded
Download not recorded

Please download the related document if you wish to add this activity to your record

What time are you claiming for this activity?
Mandatory fields

Add this page to your CPD activity

Step 2 of 3
Mandatory field

Add activity to my record

Step 3 of 3
Mandatory field

Activity added

An error has occurred
Please try again

If the problem persists please contact our helpline on +44 (0)1908 248 250