What is FRS 101?


FRS 101 is a framework that allows qualifying subsidiaries to benefit from a reduced disclosure requirement in their individual financial statements. This means that these entities can provide less information in their financial statements, while still complying with accounting standards. The reduced disclosure framework is available to subsidiaries that meet certain criteria, and it can help to simplify the financial reporting process for these entities.

Under FRS 101, the subsidiary company is required to provide a summary of the disclosure exemptions they have adopted when preparing their financial statements. Additionally, they must disclose the name of the parent company who is preparing the consolidated accounts that include the subsidiary. The subsidiary company, while following IFRS for recognition and measurement, will have reduced disclosures in the statutory accounts. A full list of the available reductions to disclosure can be found via the FRC.

What is the qualifying criteria?

A qualifying entity is a member of a group where the parent of that group prepares publicly available consolidated financial statements which are intended to give a true and fair view and that entity must be included under the consolidation. This excludes charities.

Shareholders must be notified in writing if the entity is planning to adopt FRS 101. The entity may only adopt FRS 101 if there are no objections from the parent company or any other shareholder who owns more than 5% of the entity.

Why would you choose to apply FRS 101?

The main benefit of applying FRS 101 is the reduction in the time taken to prepare the qualifying subsidiary company accounts. This would reduce the accounting fees associated with the preparation of the accounts, and the amount of information in the public domain. There may be a slight reduction in your audit fees as a result of reduced disclosure too.

How HLB can assist with using FRS 101

HLB can assist with using FRS 101 by offering expert guidance on the application and interpretation of the standard. Our team of experts can help you navigate the complexities of FRS 101 and ensure that you comply with its requirements. We can also provide practical advice on the preparation of financial statements and the disclosure of information. With our assistance, you can ensure that your financial statements are accurate, transparent, and compliant with FRS 101.

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