Are YOU Ready for FRS 102? Part 1 of 2

A.

Preparing the firm

1.        

Has the firm developed a training plan for all individuals on the changes to Irish GAAP?

2.       

Does the training plan include changes to Charities, and Pension Schemes templates and does the plan envisage a strategy for the use of the FRSSE 2015?

3.       

Does the training plan also include training on accounting and taxation issues for tax staff?

4.       

Does the training plan include proper use of the firm’s accounts and tax software?

5.       

Is the implementation and effectiveness of the training plan under constant review?

6.       

Has the firm confirmed when its software and reference material will be FRS 102 compliant?

7.       

Has the firm considered the work flow pressures of transitioning client businesses of all types for periods commencing 1/1/15?

B.

Reviewing the client base

8.       

Do any clients have external investors, long term loans or parent companies that will need to be contacted about the move to FRS 102?

9.       

Where clients have loan agreements, have these been reviewed to determine whether FRS 102 might cause a breach of loan covenants or other issues that should be communicated as soon as possible to the clients’ bankers? Are non-bank loan agreements in writing?

10.    

Has the firm discussed with clients what extra fees are expected to be charged in the year of transition to FRS 102, and on an ongoing basis?

11.     

Have the accounting policies applied by each client been reviewed to identify any need to obtain fair value measures, and has this been discussed with the clients concerned?

12.    

Is a plan in place to communicate to charities (and other specialist entities like pension schemes) the changes that are relevant to them?

C.

Accounting issues (not a comprehensive list but an indication of key areas)

13.    

Have clients’ financial arrangements been reviewed to ensure no “other” financial instruments exist (which would need to be valued at fair value) under Section 12?

14.    

Do any clients have long term loans at an interest rate below the entity’s market rate of interest (If so this would trigger the need to adjust the loan using the present value at an effective market rate)?

15.    

For investment properties: has the client been warned that movements will now pass through the profit and loss account and attract a deferred tax liability?

16.    

For investment properties let to other group companies: has the client been warned they must be held at a valuation in the individual accounts (and so valuations will be needed at the transitional date, comparative year-end and first year-end under FRS 102)? 

17.    

For clients with goodwill in the balance sheet: can the useful economic life of that goodwill be estimated reliably, and if not how will the change be processed?

18.    

Have any clients recently acquired a business since transition date and so might have separate intangibles that must be recognised under FRS 102?

19.    

Where clients have any assets carried at a valuation, have they been warned that a deferred tax provision will now be necessary?

20.   

For clients with group defined benefit pension plans, has the client been advised that at least one entity in the group must recognise the surplus or deficit?

21.    

Has the firm considered whether clients’ systems will be able to identify the amount of short term employee benefits (untaken holiday pay) that should be accrued at each balance sheet date?