Introduction to new UK GAAP

By Tolley in association with Malcolm Greenbaum

The following Owner-Managed Businesses guidance note by Tolley in association with Malcolm Greenbaum provides comprehensive and up to date tax information covering:

  • Introduction to new UK GAAP
  • Background
  • Why is new UK GAAP relevant to tax practitioners?
  • The new UK GAAP framework
  • Choosing between FRS 101 and FRS 102
  • FRS 102 ― relevant sections for the tax practitioner


In this guidance note, references to ‘old UK generally accepted accounting practice’ or ‘old UK GAAP’ are to the combination of UK accounting principles contained in Financial Reporting Standards (FRSs), Statements of Standard Accounting Practice (SSAPs) and Urgent Issues Task Force abstracts (UITFs).

References to ‘new UK GAAP’ are essentially to FRS 100, FRS 101, FRS 102 and FRS 105 which replaced old UK GAAP for accounting periods beginning on or after 1 January 2015.

Companies (and unincorporated businesses) were required to adopt new UK GAAP for accounting periods beginning on or after 1 January 2015, except those eligible to use the FRS for Small-sized Entities (FRSSE) which was withdrawn a year later (see below).

Early adoption of new UK GAAP was permitted for periods ended on or after 31 December 2012, even where this resulted in a lower corporation tax liability due to differences in accounting treatment between the old and new accounting regimes.

Since 2005, companies with a listing on a regulated market in the European Economic Area (EEA) have been required to prepare their group consolidated financial statements using International Financial Reporting Standards (IFRS). Even the issuance of listed debt on such a market requires the issuer to produce consolidated IFRS accounts. This requirement isunaffected by the introduction of new UK GAAP.

In addition, all companies, listed or otherwise, have been able to use IFRS voluntarily for their individual financial statements, as an alternative to old UK GAAP. With the introduction of new UK GAAP these entities can choose to:

  • 1)continue to use full IFRS, or
  • 2)switch to FRS 101 (see below), or
  • 3)switch to FRS 102 (see below)

Companies which qualified as ‘small’ under the definition in CA 2006, ss

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