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Financial Reporting Exposure Draft (FRED) 82 was issued just before Christmas 2022.  It sets out the Financial Reporting Council’s (FRC) proposals for the amendment of FRS 102, FRS 105 and the other accounting standards applicable in the United Kingdom and Republic of Ireland as a result of its latest periodic review of the standards.  

The proposed changes set out in FRED 82 arise from the FRC’s objective of keeping the UK and Ireland standards broadly in line with the principles underlying international accounting standards, and take account of feedback received via the various outreach activities which the FRC has undertaken since the review process began in March 2021.  

The most notable areas in which changes are proposed are revenue recognition (where a five-step model based on that used by IFRS 15 is put forward) and accounting for leases (where almost all leases will be brought “on-balance sheet” using methods based on those set out in IFRS 16), but there are numerous other proposed amendments.  It is currently anticipated that the revised standards will become effective for accounting periods commencing on or after 1 January 2025.

Edward Rands covers the following topics during this session:

• Background to the periodic review, FRED 82 and supporting documents;
• Proposed changes to revenue recognition – the IFRS 15 model;
• Proposed changes to accounting for leases – the IFRS 16 model;
• Other proposed changes (including small entities, fair values and going concern); and
• A look ahead – where does the review process go from here?