Accounts prepared under FRS 101 are Companies Act accounts rather than IFRS accounts, and must therefore comply with the Companies Act 2006. In order to achieve compliance, certain amendments are made to adopted IFRS.

The Application Guidance to FRS 101 sets out the amendments to adopted IFRSs that are necessary to achieve compliance with the Companies Act 2006 and related regulations. The application guidance forms an integral part of FRS 101.

The following IFRSs are amended for FRS 101 adopters:

• IFRS 1 First-time Adoption of International Financial Reporting Standards
• IFRS 3 Business Combinations
• IRFS 4 Insurance Contracts
• IFRS 5 Non-current Assets Held for Sale and Discontinued Operations
• IAS 1 Presentation of Financial Statements
• IAS 16 Property, Plant and Equipment
• IAS 20 Accounting for Government Grants and Disclosure of Government Assistance
• IAS 37 Provisions, Contingent Liabilities and Contingent Assets

Exemptions apply to certain disclosures in the following standards:

• IFRS 2 Share-based payment +
• IFRS 3 Business Combinations +
• IFRS 5 Non-current Assets Held for Sale and Discontinued Operations
• IFRS 6 Exploration for and Evaluation of Mineral Resources
• IFRS 7 Financial Instruments: Disclosures +*
• IFRS 13 Fair Value Measurement +*
• IFRS 15 Revenue from Contracts with Customers
• IFRS 16 Leases
• IAS 1 Presentation of Financial Statements
• IAS 7 Statement of Cash Flows ^
• IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
• IAS 12 Income Taxes +
• IAS 16 Property, Plant and Equipment
• IAS 24 Related Party Disclosures
• IAS 36 Impairment of Assets +
• IAS 38 Intangible Assets
• IAS 40 Investment Property
• IAS 41 Agriculture

+ Only available when the consolidated financial statements of the parent undertaking make equivalent disclosure. The Application Guidance to FRS 100 provides detail on the interpretation of equivalence and subsequent to the UK’s exit from the EU, this will be further updated and made available on the FRC’s website at www.frc.org.uk

^ Some of the disclosure exemptions are only available when the consolidated financial statements of the parent undertaking make equivalent disclosure.

* Financial institutions cannot take advantage of these disclosure exemptions other than to the extent that IFRS 13 disclosures relate to assets and liabilities other than financial instruments. Non-financial institutions may generally take advantage of these exemptions. However, additional disclosures are required if they hold certain financial instruments at fair value.

The entity must include in the notes to the financial statements:

• a brief narrative summary of the disclosure exemptions adopted; and
• the name of the parent undertaking and details of where the consolidated financial statements can be found.

FRS 101 may be applied to the individual financial statements of a qualifying entity that are intended to give a true and fair view. A qualifying entity is a member of a group where the parent of that group prepares publicly available consolidated financial statements which are intended to give a true and fair view and that member is included in the consolidation.

A qualifying entity that is required to prepare consolidated financial statements, or which voluntarily choses to do so, may not apply FRS 101 in its consolidated financial statements.

A charity may not be a qualifying entity.

FRED 86 Draft amendments to FRS 101 Reduced Disclosure Framework sets out proposals relating to the new IFRS 18 ‘Presentation and Disclosure in Financial Statements’ and IFRS 19 ‘Subsidiaries without Public Accountability: Disclosures’, including:

• a new exemption from certain new IFRS 18 requirements, including those mandating disclosure of management-defined performance measures;
• an amendment to prevent qualifying entities from applying both FRS 101 and IFRS 19.