By Liz McCormick.
January 1st has now passed and the FRS 102 transition year begins!
First to be impacted will be those with a 31st December year end.
There have been many publications issued on the subject and the main issues have been identified.
As an accounts and audit compliance team we would like to highlight the most common areas of concern that we have come across to date:
Holiday Pay Accrual
For any company with a holiday year which is not coterminous with the accounting year, an accrual will have to be made for holiday still due to all employees and not taken.
For companies where the holiday year and the accounting year are coterminous there is a requirement to accrue for any holiday held over to the next year.
Any investment properties will need to be valued at the start of the accounting year in 2015 to give a comparative number at the end of the accounting year in order to determine the unrealised gain or loss on the property.
Investment properties now include properties let to subsidiary companies in the group.
Foreign Exchange Contracts
Any forex contracts will need a fair value at the start of the accounting year again for comparison to fair value at the end of the year and to provide a comparative figure in the year end accounts.
More deferred tax calculations will be required at the year end and we need to allow time for the tax teams to do this, so earlier preparation of the accounts is encouraged.
Some intercompany balances will need to be given a term so that discounting can be applied if the period is longer than one year.
Call early in 2015 and we will help to ensure as much as possible is in place to make the year end compliance with FRS 102 more straightforward.