Amendments to FRS 101 2016/17 cycle

On 12 July 2017, the FRC issued ‘Amendments to FRS 101 – 2016/17 cycle’ following its annual review of the FRS 101 Reduced Disclosure Framework.

The amendments provide the following disclosure exemptions in relation to IFRS 16 leases:

  • lessees need not provide all lease-related information in a single disclosure note;
  • lessees need not disclose a maturity analysis of lease liabilities, provided the company law requirement to provide details on indebtedness is presented separately for lease liabilities and other liabilities, and in total; and
  • lessors need not make certain disclosures about the income they derive from their leases, nor provide an explanation of significant changes in the carrying amount of any finance leases.

These exemptions are available from when IFRS 16 is applied.

A few amendments have also been made to Appendix II: Note on legal requirements. The most notable is a reminder that when applying IFRS 9, its requirement to present fair value gains or losses on financial liabilities that are attributable to changes in an entity’s own credit risk in OCI, will usually be a departure from the Companies Act 2006. This is because, unless one of its exceptions applies, the Companies Act 2006 requires the entire fair value gain or loss to be recognised in profit or loss,. The two relevant exceptions to this rule are; when hedge accounting is being applied; and for exchange differences arising on monetary items which form part of the net investment in a foreign entity. As a result, when applicable, disclosure will need to be given in the notes to the accounts of the departure, the reasons for it and its effect.

For further information please contact Paul Merris.