UK GAAP simplification from 2019

The Financial Reporting Council has confirmed amendments to UK GAAP following its first review. The amendments are intended to address implementation issues following the introduction of FRS 102 in 2015 and to simplify the standard and make it easier to use.

The main amendments are to:

• simplify the measurement of directors’ loans to small entities;
• require fewer intangible assets to be separated from goodwill in a business combination;
• permit investment property rented to another group entity to be measured by reference to cost, rather than fair value;
• expand the circumstances in which a financial instrument may be measured at amortised cost, rather than fair value; and
• simplify the definition of a financial institution.

In general, the amendments are effective for accounting periods beginning on or after 1 January 2019, with early application permitted.