THE FRC has issued new accounting and reporting requirements as a potentially temporary fill for a gap for the insurance industry.
Financial Reporting Standard (FRS) 103 will be used by companies that currently use FRS 102 in the UK and Ireland and can be added to UK and Irish GAAP.
There is a gap for companies currently using FRS 102 which the FRC has now addressed, however, it has said this could be a temporary fix due to reporting requirement changes being made by the IASB.
“The FRC expects FRS 103 to provide an interim solution while the IASB completes its project to revise accounting for insurance contracts,” a statement from the FRC said.
“The FRC, therefore, expects to review FRS 103 and consult on any proposed changes after the IASB has completed its project, although the exact timing of this review has yet to be determined.”
FRS 103 was developed with IFRS in mind and will allow entities, to continue with their current accounting practices for insurance contracts, but permits them the flexibility to make improvements in their accounting requirements when using IFRS and GAAP.
Roger Marshall (pictured), FRC board member and chair of the Accounting Council said: “We are issuing FRS 103 to fill a gap in UK and Irish accounting standards for those entities applying FRS 102 that have insurance contracts.
“We recognise that there are forthcoming changes to the regulatory framework for insurers, as well as on-going work internationally on financial reporting for insurance contracts, and as a result we are allowing entities, generally, to continue with their existing accounting policies for the time being. We expect to revisit this topic in a few years’ time, to consider whether changes to FRS 103 are desirable in response to regulatory or international accounting developments.”
The IASB has issued amendments to its existing insurance contracts accounting standard, IFRS 4
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