The Triennial Review amendments to FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland were issued in December 2017.  In part 1 of this three-part blog I’ll provide an overview of the areas affected by the amendments.  Part 2 details which changes can be implemented when and part 3 outlines how to apply them.

All paragraph references relate to the Triennial review 2017 amendments .

What’s changed?

Many of the amendments to FRS 102 are editorial or aim to clarify, rather than change, accounting treatments.  These should not - famous last words - impact entities significantly, although it will be important for the directors of each reporting entity to satisfy themselves  that the clarifications do not result in changes to existing treatments. 

The more significant amendments are to areas such as directors’ loans to small entities, investment properties and intangible assets acquired in business combinations.

  •  Directors’ loans (para 167)

For small entities (irrespective of whether they are applying Section 1A Small Entities), loans from a directors’ group of close family members may be measured at transaction price (rather than fair value), provided that group contains at least one shareholder in the entity.  This relief is now also extended to small LLPs.

  • Investment properties (IPs) (paras 247-249)

The “undue cost or effort” exemption has been removed, meaning investment properties must now be measured at fair value.  However, for IPs rented to other group entities, an accounting policy choice is introduced between measurement at cost or fair value.

  • Intangible assets acquired in business combinations (para 280)

Fewer intangibles are required to be recognised separately from goodwill.  But separate recognition is allowed if it is providing useful information.


Other key amendments are highlighted below; this is not a comprehensive list but covers areas likely to affect a significant number of entities: 

  • Disclosure of changes in net debt by entities preparing a cash flow statement (para 113)
  • Introduction of a principles-based description of a basic financial instrument to support the detailed criteria currently specified (para 161)
  • Clarification of the treatment of pre-contract costs in construction contracts (para 340)
  • Clarifications around the treatment of debt for equity swaps (para 330)
  • Recognition of the tax effects of gift aid payments from subsidiaries to charitable parents (para 395)
  • Exemption from disclosing key management personnel (KMP) compensation where KMP and directors are the same and the entity is required to disclose directors’ remuneration (para 422)
  • Narrowing of the definition of a financial institution (para 479).

FRS 102 is the cornerstone of new UK GAAP and for most, it has only been applied since 2015.  It made sense therefore to try to avoid making fundamental changes while the standard is still bedding down.  Thus the amendments are intended to be targeted and pragmatic.  However, they may prove very significant for some and inevitably some considerable effort will be needed  to ensure compliance.   


The Financial Reporting Faculty is working to provide guidance to members on the changes, including but not limited to this series of blogs. We  are hosting a UK GAAP update webinar on 22 March presented by Jenny Carter, director of UK Accounting Standards at the FRC, and Danielle Stewart, Head of Financial Reporting at RSM. They will discuss the key changes and provide some practical insights. 

A further webinar focusing on financial instruments under FRS 102 will take place on 31 May, and further resources will follow as we listen to member questions and concerns.