00 Amends to FRS 102-title 1.

1 Financial Reporting CouncilMarch 2016 Amendments to FRS 102 The Financial Reporting Standardapplicable in the UK and Republic of IrelandFair value hierarchy disclosuresAccounting and ReportingAmendment to StandardFurther copies, (post-free) can be obtained from:FRC PublicationsLexis House30 Farringdon StreetLondonEC4A 4 HHTel: 0845 370 1234 Email: order online at: to FRS 102 04/03/2016 10:23 Page 1 The FRC is responsible for promoting high quality corporategovernance and reporting to foster investment. We set theUK Corporate Governance and Stewardship Codes as wellas UK standards for accounting, auditing and actuarial represent UK interests in international also monitor and take action to promote the quality of corporate reporting and auditing.

2 We operate independentdisciplinary arrangements for accountants and actuaries,and oversee the regulatory activities of the accountancy and actuarial professional FRC does not accept any liability to any party for any loss, damage or costs howsoever arising, whether directly or indirectly, whether in contract, tort or otherwise from any action or decision taken (or not taken) as a result of any person relying on or otherwise using this document or arising from any omission from it. The Financial Reporting Council Limited 2016 The Financial Reporting Council Limited is a company limited by guarantee. Registered in England number 2486368. Registered Office:8th Floor, 125 London Wall, London EC2Y 5 ASThis Financial Reporting Standard contains material in which the IFRS Foundation holds copyright and which has been reproduced with its permission.

3 The copyright notice is reproduced on page to FRS 102 04/03/2016 10:23 Page 2 March 2016 Amendments to FRS 102 The Financial Reporting Standardapplicable in the UK and Republicof IrelandFair value hierarchy disclosuresFinancial Reporting CouncilAmendments to FRS 102 The Financial Reporting Standard applicable in the UK andRepublic of Ireland Fair value hierarchy disclosuresis an amendment to an accountingstandard. It is issued by the Financial Reporting Council in respect of its application in theUnited Kingdom and promulgated by the Institute of Chartered Accountants in Ireland inrespect of its application in the Republic of to FRS 102 The Financial Reporting Standard applicablein the UK and Republic of Ireland4 Section 1 Scope5 Section 34 Specialised Activities6 Approval by the FRC7 The Accounting Council s Advice to the FRC to issueAmendments toFRS 102 Fair value hierarchy disclosures8 Financial Reporting Council 12 Amendments to FRS 102.

4 Fair value hierarchy disclosures (March 2016)Summary(i) With effect from 1 January 2015 the Financial Reporting Council (FRC) revised financialreporting standards in the United Kingdom and Republic of Ireland. The revisionsfundamentally reformed financial reporting, replacing the extant standards with fiveFinancial Reporting Standards:(a) FRS 100 Application of Financial Reporting Requirements;(b) FRS 101 Reduced Disclosure Framework;(c) FRS 102 The Financial Reporting Standard applicable in the UK and Republic ofIreland;(d) FRS 103 Insurance Contracts; and(e) FRS 104 Interim Financial FRC has also issued FRS 105 The Financial Reporting Standard applicable to theMicro-entities Regimeto support the implementation of the new micro-entities limited amendments to FRS 102 simplify the preparation of disclosures aboutfinancial instruments for financial institutions and retirement benefit plans.

5 (ii) The FRC s overriding objective in setting accounting standards is to enable users ofaccounts to receive high-quality understandable financial reporting proportionate to thesize and complexity of the entity and users information needs.(iii) In meeting this objective, the FRC aims to provide succinct financial reporting standardsthat:(a) have consistency with international accounting standards through the application ofan IFRS-based solution unless an alternative clearly better meets the overridingobjective;(b) reflect up-to-date thinking and developments in the way entities operate and thetransactions they undertake;(c) balance consistent principles for accounting by all UK and Republic of Ireland entitieswith practical solutions, based on size, complexity, public interest and users information needs;(d) promote efficiency within groups.

6 And(e) are cost-effective to to FRS 102 Fair value hierarchy disclosures(iv) These amendments to FRS 102, which are relevant only to financial institutions andretirement benefit plans, were consulted on in FRED 62 Draft amendments to FRS 102 Fair value hierarchy disclosures. They relate to the disclosure of financial instruments inan analysis based on the fair value hierarchy. Taking into account the feedback toFRED 62 these amendments simplify the preparation of disclosures about financialinstruments for the entities affected, whilst increasing the consistency with disclosuresrequired by EU-adopted IFRS that users of the financial statements will often be Reporting Council 3 Amendments to FRS 102 The Financial Reporting Standardapplicable in the UK and Republic of Ireland4 Amendments to FRS 102: Fair value hierarchy disclosures (March 2016)Amendments to Section 1 Scope1 The following paragraph sets out the amendments to Section 1 Scope(inserted text isunderlined).

7 2 Paragraph is inserted as In March 2016 amendments were made to paragraphs and of thisFRS, revising the disclosure requirements for financial institutions and retirementbenefit plans. An entity shall apply these amendments for accounting periodsbeginning on or after 1 January 2017. Early application is permitted. If an entityapplies these amendments to an accounting period beginning before1 January 2017 it shall disclose that Reporting Council 5 Amendments to Section 34 Specialised Activities3 The following paragraphs set out the amendments to Section 34 Specialised Activities(deleted text is struck through, inserted text is underlined).

8 4 Paragraph is amended as For financial instruments held atfair valuein the statement of financial position, afinancial institution shall disclose for each class of financial instrument, an analysisof the level in thefollowing fair value hierarchy (as set out in paragraph )intowhich the fair value measurements are fair value measurement iscategorised in its entirety on the basis of the lowest level input that is significant tothe fair value measurement in its 1: The unadjusted quoted price in anactive marketfor identicalassetsorliabilitiesthat the entity can access at the measurement 2: Inputs other than quoted prices included within Level 1 that areobservable (ie developed using market data) for the asset or liability, eitherdirectly or 3.

9 Inputs are unobservable (ie for which market data is unavailable) forthe asset or In paragraph assets will no longer be shown in bold Paragraph is amended as For financial instruments held at fair value in the statement of net assets availablefor benefits, a retirement benefit plan shall disclose for each class of financialinstrument, an analysis of the level in thefollowing fair value hierarchy (as set outin paragraph )into which the fair value measurements are fairvalue measurement is categorised in its entirety on the basis of the lowest levelinput that is significant to the fair value measurement in its 1: The unadjusted quoted price in anactive marketfor identical assetsor liabilities that the entity can access at the measurement 2: Inputs other than quoted prices included within Level 1 that areobservable (ie developed using market data) for the asset or liability, eitherdirectly or 3: Inputs are unobservable (ie for which market data is unavailable) forthe asset or Amendments to FRS 102.

10 Fair value hierarchy disclosures (March 2016)Approval by the FRCA mendments to FRS 102 The Financial Reporting Standard applicable in the UK and Republicof Ireland Fair value hierarchy disclosureswas approved for issue by the Board of theFinancial Reporting Council on 3 March 2016, following its consideration of the AccountingCouncil s Reporting Council 7 The Accounting Council s Advice to the FRC to issueAmendmentsto FRS 102 Fair value hierarchy disclosuresIntroduction1 This report provides an overview of the main issues that have been considered by theAccounting Council in advising the Financial Reporting Council (FRC) to issueAmendments to FRS 102 The Financial Reporting Standard applicable in the UK andRepublic of Ireland Fair value hierarchy The FRC, in accordance with theStatutory Auditors (Amendment of Companies Act 2006and Delegation of Functions etc) Order 2012(SI 2012/1741), is a prescribed body forissuing accounting standards in the UK.