FRC to amend accounting for debt instruments

by Richard Crump

More from this author

14 Feb 2014

  • Comments
Roger Marshall

RESTRICTIVE rules on how companies should measure debt instruments are to be lifted in order to reduce the reporting burden and avoid unnecessary cost and effort for businesses, the UK accounting watchdog has said.

The FRC has issued proposals that will reduce the need for businesses to measure debt instruments at fair value.

The exposure draft, FRED 54: Draft Amendments to FRS 102 - Basic financial instruments proposes to amend the conditions that determine whether debt instruments can be measured at amortised cost or fair value under new UK and Irish GAAP (FRS 102).

Depending on the terms and conditions of the debt instruments used by companies, new UK and Irish GAAP determines whether amortised cost or fair value is the appropriate method of measuring them.

Since the FRC issued new UK and Irish GAAP in March 2013 for mandatory implementation in 2015, businesses and their advisers have noted that the requirements setting out when a debt instrument can be measured at amortised cost may be overly restrictive.

The FRC has therefore reconsidered the requirements to reduce the reporting burden and avoid unnecessary cost and effort for businesses.

"We aim to finalise the new requirements by this summer in order to allow as much time as possible for implementation," said Roger Marshall [pictured], FRC board member and chair of the FRC's Accounting Council.

The comment period for these proposals closes on 30 April 2014. The amendments are proposed to be effective from the same date as the new UK and Irish GAAP, 1 January 2015.

Visitor comments

blog comments powered by Disqus

Add your comment

We won't publish your address

By submitting a comment you agree to abide by our Terms & Conditions

Your comment will be moderated before publication

  • Send


Financial Planner

The Ministry of Defence Surgeon General’s (SG) Finance Department, Lichfield, Staffordshire, Permanent, Full Time, £ £30,008




Get the latest financial news sent directly to your inbox

  • Best Practice
  • Business
  • Daily Newsletter
  • Essentials


Search for jobs
Click to search our database of all the latest accountancy roles

Create a profile
Click to set up your profile and let the best recruiters find you

Jobs by email
Sign up to receive regular updates with the latest roles suitable for you



Why budgeting fails: One management system is not enough

If budgeting is to have any value at all, it needs a radical overhaul. In today's dynamic marketplace, budgeting can no longer serve as a company's only management system; it must integrate with and support dedicated strategy management systems, process improvement systems, and the like. In this paper, Professor Peter Horvath and Dr Ralf Sauter present what's wrong with the current approach to budgeting and how to fix it.


iXBRL: Taking stock. Looking forward

In this white paper CCH provide checklists to help accountants and finance professionals both in practice and in business examine these issues and make plans. Also includes a case study of a large commercial organisation working through the first year of mandatory iXBRL filing.