Introduction to new UK GAAP

Produced by Tolley in association with Malcolm Greenbaum

The following Corporation Tax guidance note Produced by Tolley in association with Malcolm Greenbaum provides comprehensive and up to date tax information covering:

  • Introduction to new UK GAAP
  • Background
  • Why is the 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
  • Amendments to FRS 102 and FRS 105

Introduction to new UK GAAP


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

References to the ‘new UK GAAP’ are essentially to FRS 100, FRS 101, FRS 102 and FRS 105, which replaced the old UK GAAP for accounting periods beginning on or after 1 January 2015 (1 January 2016 for FRS 105).

Companies that qualified as ‘small’ under the definition in CA 2006, ss 381–384 were eligible to use the FRS for FRSSE in preparing their financial statements for accounting periods beginning before 1 January 2016. The FRSSE was withdrawn for accounting periods beginning on or after 1 January 2016.

Such companies have had to adopt either FRS 102 (with small company disclosure exemptions) or, if eligible, FRS 105 (as described below) for accounting periods on or after 1 January 2016.

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 the 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 is unaffected by the introduction of the new UK GAAP.

From 1 January 2021, EU endorsed IFRS is replaced by UK endorsed IFRS as a result of the withdrawal of the United Kingdom from the EU. As at that date, EU-IFRS and UK-IFRS were identical, but the UK may decide to change UK-IFRS in future from time to time.

In addition, all companies listed or otherwise, have been able to use EU-IFRS voluntarily for their individual financial statements, as an alternative to UK GAAP. These entities can choose to use:

  1. use full EU(UK)-IFRS

  2. FRS 101 (see below), or

  3. FRS 102 (see below)

Micro-entity companies as defined in Companies Act

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