FRS 5 Reporting the Substance of Transactions
Issued April 1994. Effective for accounting periods ending on or after 22 September 1994. Amended November 2003.
FRS 5 has been superseded by FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland for accounting periods beginning on or after 1 January 2015. For more information visit:
Synopsis
The fundamental principle of FRS 5 is that an entity’s financial statements should reflect the substance of the transactions entered into.
This requires that the commercial effect of a transaction and any resulting assets, liabilities, gains and losses are shown and that the accounts do not merely report the legal form of a transaction.
FRS 5 also includes 7 application notes giving detailed guidance on particular problems such as consignment stock, sale and repurchase agreements and factoring of debts.
Last updated 21 June 2015
