FRS 101 allows qualifying entities to adopt the recognition, measurement and disclosure requirements of adopted IFRS, with:

• certain amendments to the requirements of IFRS in order to comply with the Companies Act; and
• a reduction in the required level of disclosures.

Adopted IFRS are EU-adopted IFRS for annual periods beginning prior to 1 January 2021(unless amendments are adopted early); after this date they are UK-adopted international accounting standards for companies that apply UK company law and EU-adopted IFRS for companies that apply Irish company law.

Any qualifying entity taking advantage of the reduced disclosure framework must state in the notes to the financial statements that the financial statements were prepared in accordance with FRS 101. Note that as the full requirements of adopted IFRS are not complied with, the financial statements should not contain an unreserved statement of compliance with IFRS.

• Find out more about EU endorsement of IFRS
• Find out more about UK endorsement of IFRS

Accounts prepared under FRS 101 are Companies Act accounts rather than IFRS accounts, and must therefore comply with the Companies Act 2006. In order to achieve compliance, certain amendments are made to adopted IFRS.

The Application Guidance to FRS 101 sets out the amendments to adopted IFRSs that are necessary to achieve compliance with the Companies Act 2006 and related regulations. The application guidance forms an integral part of FRS 101.

The following IFRSs are amended for FRS 101 adopters:

• IFRS 1 First-time Adoption of International Financial Reporting Standards
• IFRS 3 Business Combinations
• IRFS 4 Insurance Contracts
• IFRS 5 Non-current Assets Held for Sale and Discontinued Operations
• IAS 1 Presentation of Financial Statements
• IAS 16 Property, Plant and Equipment
• IAS 20 Accounting for Government Grants and Disclosure of Government Assistance
• IAS 37 Provisions, Contingent Liabilities and Contingent Assets

Exemptions apply to certain disclosures in the following standards:

• IFRS 2 Share-based payment +
• IFRS 3 Business Combinations +
• IFRS 5 Non-current Assets Held for Sale and Discontinued Operations
• IFRS 6 Exploration for and Evaluation of Mineral Resources
• IFRS 7 Financial Instruments: Disclosures +*
• IFRS 13 Fair Value Measurement +*
• IFRS 15 Revenue from Contracts with Customers
• IFRS 16 Leases
• IAS 1 Presentation of Financial Statements
• IAS 7 Statement of Cash Flows
• IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
• IAS 16 Property, Plant and Equipment
• IAS 24 Related Party Disclosures
• IAS 36 Impairment of Assets +
• IAS 38 Intangible Assets
• IAS 40 Investment Property
• IAS 41 Agriculture

+ Only available when the consolidated financial statements of the parent undertaking make equivalent disclosure. The Application Guidance to FRS 100 provides detail on the interpretation of equivalence and subsequent to the UK’s exit from the EU, this will be further updated and made available on the FRC’s website at www.frc.org.uk

* Financial institutions cannot take advantage of these disclosure exemptions other than to the extent that IFRS 13 disclosures relate to assets and liabilities other than financial instruments. Non-financial institutions may generally take advantage of these exemptions. However, additional disclosures are required if they hold certain financial instruments at fair value.

The entity must include in the notes to the financial statements:

• a brief narrative summary of the disclosure exemptions adopted; and
• the name of the parent undertaking and details of where the consolidated financial statements can be found.

FRS 101 may be applied to the individual financial statements of a qualifying entity that are intended to give a true and fair view. A qualifying entity is a member of a group where the parent of that group prepares publicly available consolidated financial statements which are intended to give a true and fair view and that member is included in the consolidation.

A qualifying entity that is required to prepare consolidated financial statements, or which voluntarily choses to do so, may not apply FRS 101 in its consolidated financial statements.

A charity may not be a qualifying entity.