January 2015 seems like a long way off, but FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland, will soon be a reality and could alter the bottom line reported profit of many companies – up to as many as two-thirds of the 50,000 affected by the changes. The knock-on effect in terms of tax, adjustments in earn-outs based on profits and levels of distributable reserves, needs to be considered now in readiness for any fallout. FRS 102 is set to replace UK GAAP soon and, as yet, many affected companies are simply unaware of the impact of the changes.

The new FRS 102 framework is one of three standards issued by the Financial Reporting Council (FRC) and will replace all UK financial reporting standards for medium and large non-listed companies whose financial year begins on or after 1 January 2015. It will also bring the UK more in line with international reporting standards.