FRS 101 Reduced Disclosure Framework (March 2018)

1 financial reporting CouncilMarch 2018 FRS 101 Reduced Disclosure FrameworkDisclosure exemptions from EU-adoptedIFRS for qualifying entities Accounting and ReportingStandardFurther copies, ????? (post-free) can be obtained from:FRC PublicationsLexis House30 Farringdon StreetLondonEC4A 4 HHTel: 0330 161 1234 Email: order online at: 101 3/16/2018 11:37 AM Page 1 The FRC's mission is to promote transparency and integrity in business. The FRC sets the UK Corporate Governance and Stewardship Codes and UK standards for accounting and actuarial work; monitors and takes action to promote the quality of corporate reporting ; and operates independent enforcement arrangements for accountants and actuaries. As the Competent Authority for audit in the UK the FRC sets auditing and ethical standards and monitors and enforces audit 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.

2 The financial reporting Council Limited 2018 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 financial reporting Standard contains material in which the IFRS Foundation holds copyright and which has been reproduced with its permission. The copyright notice is reproduced on page 101 3/16/2018 11:37 AM Page 2 March 2018 FRS 101 Reduced Disclosure FrameworkDisclosure exemptions from EU-adoptedIFRS for qualifying entitiesFinancial reporting CouncilFRS 101 Reduced Disclosure Frameworkis an accounting standard. It is issued by theFinancial reporting Council, as a prescribed body, in respect of its application in theUnited Kingdom and the Republic of 101 Reduced Disclosure Framework5 Application GuidanceAmendments to International financial reporting standards as adopted inthe European Union for compliance with the Act and the Regulations9 AppendicesI Glossary14II Note on legal requirements16 III Republic of Ireland legal references25 Approval by the FRC37 Basis for ConclusionsFRS 101 Reduced Disclosure Framework38 financial reporting Council 12 FRS 101 (March 2018) Overview(i)

3 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 101 Reduced Disclosure Framework (ii) This FRS sets out an optional Reduced Disclosure Framework which addresses thefinancial reporting requirements and Disclosure exemptions for the individual financialstatements of subsidiaries and ultimate parents that otherwise apply the recognition,measurement and Disclosure requirements of EU-adopted IFRS.(iii) Disclosure exemptions are available to a qualifying entity, as defined in the glossary to thisFRS, in its individual financial statements (but not in consolidated financial statementswhich it is required or voluntarily chooses to prepare).

4 However, a qualifying entity which isa financial institution is not exempt from the Disclosure requirements of IFRS 7 FinancialInstruments: disclosures , IFRS 13 Fair Value Measurementto the extent that they applyto financial instruments, and paragraphs 134 to 136 of IAS 1 Presentation of FinancialStatements.(iv) A qualifying entity may apply the Reduced Disclosure Framework regardless of the financialreporting Framework applied in the consolidated financial statements of the group.(v) financial statements prepared by a qualifying entity in accordance with this FRS are notaccounts prepared in accordance with EU-adopted IFRS. A qualifying entity must ensure itcomplies with any relevant legal requirements applicable to it. For example, individualfinancial statements prepared by companies in accordance with this FRS are CompaniesAct accounts and not IAS accounts as set out in section 395(1) of the Act, and thereforesuch accounts must comply with the requirements of the Act and any relevant regulationssuch as theLarge and Medium-Sized Companies and Groups (Accounts and Reports)Regulations 2008(SI 2008/410).

5 Organisation of FRS 101(vi) Terms defined in the Glossary (Appendix I) are inbold typethe first time they appear inFRS 101.(vii) This edition of FRS 101 issued in March 2018 updates the edition of FRS 101 issued inSeptember 2015 for the following amendments:(a)Amendments to FRS 101 Reduced Disclosure Framework 2015/16 cycleissued inJuly 2016;(b)Amendments to FRS 101 Reduced Disclosure Framework and FRS 102 TheFinancial reporting Standard applicable in the UK and Republic of Ireland Notification of shareholdersissued in December 2016;(c)Amendments to FRS 101 Reduced Disclosure Framework 2016/17 cycleissued inJuly 2017;(d)Triennial review 2017 amendmentsissued in December 2017; and(e) some minor typographical or presentational reporting Council 34 FRS 101 (March 2018) FRS 101 Reduced Disclosure FrameworkDisclosure exemptions from EU-adopted IFRS for qualifying entitiesObjective1 The objective of this financial reporting Standard (FRS) is to set out the disclosureexemptions (a Reduced Disclosure Framework )

6 For theindividual financial statementsofsubsidiaries, including intermediate parents, and ultimate parents that otherwise apply therecognition, measurement and Disclosure requirements ofEU-adopted This FRS may be applied to the individual financial statements of aqualifying entity,asdefined in the glossary, that are intended to give a true and fair view of the assets,liabilities, financial position and profit or loss for a A qualifying entity which is required to prepare consolidated financial statements (forexample, if the entity is required by section 399 of theActto prepare group accounts, andis not entitled to any of the exemptions in sections 400 to 402 of the Act), or whichvoluntarily chooses to do so, may not apply this FRS in its consolidated [Deleted]4A financial statements prepared by qualifying entities in accordance with this FRS are notaccounts prepared in accordance with EU-adopted IFRS.

7 A qualifying entity must ensure itcomplies with any relevant legal requirements applicable to it. For example, individualfinancial statements prepared by companies in accordance with this FRS are CompaniesAct accounts and not IAS accounts as set out in section 395(1) of the Act, and thereforesuch accounts must comply with the requirements of the Act and any relevant regulationssuch as theLarge and Medium-Sized Companies and Groups (Accounts and Reports)Regulations 2008(SI 2008/410). Reduced disclosures for subsidiaries and ultimate parents5 A qualifying entity applying this FRS to its individual financial statements may takeadvantage of the Disclosure exemptions in paragraphs 7A to 9, subject to paragraph 7,provided that:(a) [Deleted](b) It otherwise applies as its financial reporting Framework the recognition,measurement and Disclosure requirements of EU-adopted IFRS, but makesamendments to EU-adopted IFRS requirements where necessary in order tocomply with the Act and theRegulations.

8 This is to ensure that the financialstatements prepared by companies in accordance with this FRS, comply with therequirements of the Act and Regulations. The Application Guidance to this FRS setsout the amendments necessary to remove conflicts between EU-adopted IFRS andthe Act and Regulations. For the avoidance of doubt, the Application Guidance is anintegral part of this FRS and is applicable to any qualifying entity applying this FRS,including those that are not companies.(c) It discloses in the notes to its financial statements:(i) a brief narrative summary of the Disclosure exemptions adopted; andFinancial reporting Council 5(ii) the name of the parent1of the group in whose consolidated financial statementsits financial statements are consolidated, and from where those financialstatements may be [Deleted]7 A qualifying entity which is afinancial institutionmay take advantage in its individualfinancial statements of the Disclosure exemptions set out in paragraphs 7A to 9 of thisFRS, except for:(a) the Disclosure exemptions from IFRS 7 financial Instruments: disclosures (seeparagraph 8(d)).

9 (b) the Disclosure exemptions from IFRS 13 Fair Value Measurement(seeparagraph 8(e)) to the extent that they apply to financial instruments2; and(c) the Disclosure exemptions from paragraphs 134 to 136 of IAS 1 Presentation ofFinancial Statements(see paragraph 8(g)).7A On first-time adoption of this standard, a qualifying entity shall apply the requirements ofparagraphs 6 to 33 of IFRS 1 First-time adoption of International financial ReportingStandards(subject to the requirements of paragraph 12 ofFRS 100) except for therequirement of paragraphs 6 and 21 to present an opening statement of financial positionat thedate of transition. References to IFRS in IFRS 1 shall be interpreted as referencesto EU-adopted IFRS as amended in accordance with paragraph 5(b) of this A qualifying entity may take advantage of the following Disclosure exemptions, from whenthe relevant standard is applied:(a) The requirements of paragraphs 45(b) and 46 to 52 of IFRS 2 Share-based Payment,provided that for a qualifying entity that is:(i) a subsidiary, the share-based payment arrangement concerns equityinstruments of another group entity;(ii) an ultimate parent, the share-based payment arrangement concerns its ownequity instruments and its separate financial statements are presented alongsidethe consolidated financial statements of the group.

10 And, in both cases, provided that equivalent disclosures are included in theconsolidated financial statements of the group in which the entity is consolidated.(b) The requirements of paragraphs 62, B64(d), B64(e), B64(g), B64(h), B64(j) toB64(m), B64(n)(ii), B64(o)(ii), B64(p), B64(q)(ii), B66 and B67 of IFRS 3 BusinessCombinationsprovided that equivalent disclosures are included in the consolidatedfinancial statements of the group in which the entity is consolidated.(c) The requirements of paragraph 33(c) of IFRS 5 Non-current Assets Held for Sale andDiscontinued Operationsprovided that equivalent disclosures are included in theconsolidated financial statements of the group in which the entity is consolidated.(d) The requirements of IFRS 7 financial Instruments: disclosures , provided thatequivalent disclosures are included in the consolidated financial statements of thegroup in which the entity is parent identified in the definition of the term qualifying entity (see Appendix IGlossary).