FRC issues amendments to FRS 102 to maintain alignment with IFRS 18

The Financial Reporting Council (FRC) has issued amendments to FRS 102 which update the framework a company uses when adapting the format of their balance sheet and profit and loss account.

Following a consultation period last year, the FRC has introduced changes to FRS 102 to reflect the replacement of IAS 1 Presentation of Financial Statements with IFRS 18 Presentation and Disclosure in Financial Statements. IFRS 18 is effective for periods commencing on or after 1 January 2027.

Company law gives certain entities the option to adapt the format used for its balance sheet and/or profit and loss account. FRS 102 sets out the specific formats to be used when an entity chooses this option. Where an entity does not choose to adapt their balance sheet or profit and loss format, these changes will have no impact to the reporting entity.

In addition to this change, the FRC has also made amendments to FRS 102 and FRS 105 which are intended to make limited clarifications to the 2024 Periodic Review amendments. Amendments have been made to the following sections of FRS 102 and FRS 105.

• Section 9 Consolidated and Separate Financial Statements of FRS 102. The wording of paragraph 9.3 has been amended to provide clarification.
• Section 13 Inventories of FRS 102. Paragraph 13.14 (Cost of inventories of a service provider) has been deleted, and
• Section 10 Inventories of FRS 105. Paragraph 10.13 (Cost of inventories of a service provider) has been deleted.