Transition from FRS 105 to FRS 102

Produced by Tolley in association with

Corporation Tax

Guidance

Introduction

The fundamental principle when transitioning from FRS 105 to FRS 102 is that any changes in accounting policy must be applied retrospectively.

There are, however, transitional rules to make the process more efficient, where some adjustments will not be required.

Transitional adjustments can affect taxable profits and consequently the corporation tax computation in the year in which FRS 102 is adopted (and subsequently). This is covered in detail in the Transitional issues affecting the corporation tax computation and return guidance note.

Accounting for current and deferred tax

FRS 105 does not permit the booking of deferred tax. On transition to FRS 102, deferred tax assets and liabilities will need to be booked in accordance with the principles in FRS 102, s 29.

Transitional exemptions

Business combinations

An entity is not required to restate business combinations that occurred prior to the start of the comparative year. However, if it chooses to restate, the entity must do so in respect of all subsequent business combinations under FRS 102 from the earliest

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Malcolm Greenbaum

Director and Principal Trainer at Greenbaum Training and Consultancy Limited

Malcolm is a UK Chartered Accountant and Chartered Tax Advisor winning the John Wood Medal in the November 1995 CIOT sitting for the best paper on business taxation. He was previously Director of Finance and Taxation Programmes at BPP Professional Education and has delivered IFRS, US GAAP, UK Tax and VAT training (at all levels from an introduction to the complexities of IAS 39) to a multitude of organisations world-wide since 1992. Malcolm has particular experience in delivering bespoke training programmes to multi-nationals in the financial services, transport and energy sectors as well as delivering UK tax and VAT update programmes to accounting and law firms. He is passionate about training and his enthusiasm ensures that the participants enjoy the learning experience whilst gaining knowledge through their engagement in the sessions and through encouraging them to ask questions and discuss practical issues they may have. Malcolm also provides consultancy services to companies and accounting firms, including provision of VAT advice, reviewing accounting policy manuals and advising on accounting treatments of various transactions. In his spare time, Malcolm enjoys flying having gained a Private Pilot's Licence in 2014.

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