The new UK GAAP

In order to be awarded CPD units you must answer the following five random questions correctly. If you fail the test, please re-read the article before attempting the questions again.

  1. The Financial Reporting Council (FRC) in the UK has published three Financial Reporting Standards (FRS) setting out revised standards of financial reporting in the UK and Republic of Ireland. Which of the following areas do the FRSs not deal with?

  2. What has been a main effect of the new standards for UK generally accepted accounting principles (GAAP)?

  3. All entities reporting under UK GAAP will be affected by the new framework and qualifying entities will need to consider whether they wish to use the reduced disclosure framework. Why might this reduced disclosure be attractive to entities?

  4. Although the FRC is pushing ahead with moving UK GAAP onto an IFRS-based framework, it has decided to defer the mandatory effective date of the revised framework to 1 January 2015. Why has the ASB decided to defer the mandatory effective date of the framework to 2015?

  5. The ASB's drive towards an IFRS framework is likely to be supported by the majority of finance leaders. Why might they support the move towards an IFRS framework?

  6. There were a number of concerns with UK standards which prompted the change of the framework. Which of the following was not a concern to the FRC?

  7. FRS 100 does not extend the mandatory application of EU-adopted IFRS. In the absence of a requirement to prepare EU IFRS financial statements, which of the following cannot be used to prepare the individual accounts or consolidated accounts of any qualifying entity?

  8. Entities that are not required to use IFRS but wish to use its recognition and measurement requirements can choose to apply FRS 101 in their individual financial statements, benefiting from reduced disclosures, as long as they are qualifying entities. Which of the following entities are not qualifying entities?

  9. In order to use the reduced disclosure framework (RDF), the shareholders should have been notified in writing and those holding a certain percentage of shares have not objected; EU adopted IFRS have been applied; and the financial statements make specified disclosures relating to the exemptions. Which of the following shareholders may not object to the application of RDF?

  10. FRS 101 contains various exemptions from IFRS disclosures. Some of these require that equivalent disclosures are included in the consolidated financial statements of the group in which the entity is consolidated. Which of the following is not an exemption from disclosure set out in FRS 101?