With less than a year to go until implementation of the new UK GAAP accounting standard, HMRC has published two papers focusing on the tax treatment under FRS 101, Reduced Disclosure Framework, and FRS 102, The Financial Reporting Standard applicable in the UK and ROI.

The New UK GAAP will come into force for accounting periods beginning on or after 1 January 2015, but early adoption is available, subject to certain limitations.

HMRC's position is based on tax law at the date of publication of the papers, which provide an overview of the key accounting changes and tax considerations that arise for companies that transition from Current UK GAAP to either FRS 101 or FRS 102.

The key consideration for standard users is to ensure that they avoid being taxed twice due to recognition issues. The reports give detailed examples of how this will work.

Although HMRC compares the current and new frameworks, and covers transitional adjustments from a corporation tax position, the papers may also assist individuals (and other entities) that are within the charge to income tax as many of the accounting and tax issues will be similar.

The FRS 101 paper is available HERE

The FRS 102 paper is available HERE