It shows the accounting entries (and exemptions from FRS 102 where applicable) and also explains the tax consequences of the changes. The article is split into two parts –Transition to FRS 102 and FRS 102 in subsequent years. 

FRS 102 is effective for accounting periods beginning on or after 1 January 2015. It requires the comparative and opening balance sheet at the date of transition to be restated in accordance with FRS 102; the date of transition being the beginning of the earliest period for which an entity presents full comparative information. However, the opening balance sheet itself does not need to be presented. 

For example, for an entity with a 31 December year end, the first year of mandatory application will be the year ending 31 December 2015. The entity will need to restate its opening balance sheet at the date of transition (ie at 1 January 2014) and comparative balance sheet (ie at 31 December 2014) in accordance with FRS 102, although the opening balance sheet does not need to be presented. The entity will need to prepare reconciliations of equity at 1 January 2014 and 31 December 2014 and of its profit or loss for the year ending 31 December 2014. 

ACCA members applying the transition rules have raised a number of queries relating to: 

• actually applying the rules in practice – what are the ‘nuts and bolts’ of the accounting treatment?
• what are the taxation implications of the changes once implemented on the accounts?