FRS 100 Introduction

FRS 100 is the starting point of the UK financial reporting framework. It aims to set out the applicable financial reporting framework for entities reporting in the UK and Ireland. It does not contain detailed accounting requirements itself but tells an entity which framework it should apply when preparing financial statements intended to give a true and fair view. 

What are the framework options?

FRS 100 outlines available financial reporting frameworks for entities not required to use UK-adopted IFRS by law or regulation:

• UK-adopted IFRS
• FRS 101 Reduced Disclosure Framework (for qualifying entities)
• FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland
• FRS 105 The Financial Reporting Standard applicable to the Micro-entities Regime (where eligible).

The framework available for each type of entity is outlined in this table: 

	UK-adopted IFRS	FRS 101	FRS 102	FRS 105
Micro entities
Small companies
Entities not small or Micro and not required to apply adopted IFRS
Entities required to apply UK-adopted IFRS

Choosing the right reporting framework for UK groups

Groups whose securities are admitted to trading on a UK regulated market are required to prepare consolidated financial statements in accordance with UK-adopted IFRS.

AIM companies are also generally required to apply UK-adopted IFRS under the AIM Rules. For parent company and subsidiary entity financial statements, directors will often have a choice between UK-adopted IFRS and an appropriate UK GAAP framework, either FRS 102, FRS 101 or FRS 105, depending on the entity’s circumstances, eligibility and any applicable legal or regulatory requirements.

Key considerations when applying FRS 100

FRS 100 is important as it determines which financial reporting framework you can or must use. When determining the most appropriate framework, business owners should consider the following:

• Entity size: size may affect eligibility for certain reporting frameworks, particularly FRS 105 for micro-entities, and may influence the disclosure requirements applicable under UK GAAP.
• Group structure: companies within a group may have additional reporting options, such as the disclosure exemptions available under FRS 101.
• Listed or unlisted status: listed groups may be required to apply UK-adopted IFRS, whereas unlisted groups often have greater flexibility in choosing a reporting framework.
• Stakeholder requirements: consider the needs of investors, lenders, regulators and other users of the financial statements.
• Future growth plans: plans to raise finance, attract investors, acquire businesses or list the company may influence the most appropriate reporting framework.
• Cost and complexity: different frameworks can have varying reporting, disclosure and compliance requirements.