ACCA's response to the FRC’s FRED 67 draft amendments to FRS 102.
ACCA welcomes the opportunity to provide views in response to the FRC's FRED 67 draft amendments to FRS 102. This has been done with the assistance of members of ACCA’s Global Forum for Corporate Reporting, ACCA’s Financial Services and Practitioners Panels, ACCA Members' Advisory service and other ACCA members in UK and Ireland.
We are pleased to see that FRED 67 responds effectively to a number of implementation issues, notably clarifying section 11 on basic financial instruments. However, we do not agree with the removal of the 'undue cost or effort' exemption: provided that undue cost or effort is clearly defined, we believe the exemption serves a genuine purpose in ensuring that the reporting burden on entities is proportionate to the informational benefit to users of the financial statements.
We would also urge the FRC to address the issues we raised in our post-implementation review submission about distributable and non-distributable profits. The accounting of financial instruments and the measurement of investment properties at fair value under FRS 102 have raised questions about distributable and non-distributable reserves, with differences in practice emerging. Some companies record separate reserves on balance sheet and others tracking it through file notes. We would recommend that the FRC alerts the preparers to the importance of tracking the amount of non-distributable reserves from year on year.
Download our full response below.