FRS 102 – Sunshine for SMEs in the wake of Brexit

It would not be appropriate to correlate the implication of an important standard such as the FRS 102, to a political event. However, one thing for sure, is that SMEs (Small Medium Businesses) need to be prepared to face greater compliance and regulation, when dealing with Businesses abroad, in the wake of Brexit. And with FRS 102, a single coherent reporting standard replacing old UK GAAP, this is one of the many initiatives by the Financial Reporting Council, which I am confident, will help small and micro businesses grow.

The new standard based on IFRS, allows entities to deal with technical matters such as business combinations and investment properties, in a simple way and help entities comply with the Companies Act. There are also, in certain circumstances, exemptions from disclosures, which will reduce compliance burden and help businesses focus on developing their business.

Similarly, the United Arab Emirates is working on initiatives that support and help SMEs grow their business, create employment and contribute to economic growth. A prime example of this initiative is the timely updated, Federal Law No. 2 of 2015 on Commercial Companies. This requires as per Article 27.3, which requires Companies to apply International Accounting Standards and Practices upon preparing its periodic and annual accounts, to give a clear and accurate view of the profits and losses of the company.