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FRC confirms FRS 102 changes

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The Financial Reporting Council has completed its triennial review of FRS 102, confirming the interim measure affecting director’s loan accounts, announced in FRED 67 in May 2017, which will allow small entities using FRS 102 to measure loans with no explicit interest rate, or a non-market rate, at transaction price, where the director, or close family member, is a shareholder.

The amendments also confirm a further proposal, set out in FRED 68 in September 2017, allowing the tax effects of gift aid payments made by subsidiaries to their charitable parents to be taken into account at the reporting date, where it is probable that the payment will be made in the nine months following the reporting date.

Other principal amendments to FRS 102:

·         require fewer intangible assets to be separated from goodwill in a business combination;

·         permit investment property rented to another group entity to be measured by reference to cost, rather than fair value;

·         expand the circumstances in which a financial instrument may be measured at amortised cost, rather than fair value; and

·         simplify the definition of a financial institution.

The amendments confirmed in the review are effective generally for accounting periods beginning on or after 1 January 2019. See

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