ch12 - UK GAAP

who is UK accounting standards issued by

Issued by the FRC.

The main one is:

FRS 102

what is company law

Companies Act requirements.

Financial statements must:

• follow prescribed formats

• show a true and fair view

use of IFRS vs UK GAAP

• listed companies: IFRS/ IAS

• most other companies: UK GAAP or can choose IFRS

what is the statement of profit or loss in IFRS vs UK GAAP

• IFRS: Statement of profit or loss

  • UK GAAP: profit and loss account

what is the statement of financial position in IFRS vs UK GAAP

• IFRS: statement of financial position

  • UK GAAP: balance sheet

what is revenue in IFRS vs UK GAAP

• IFRS: revenue

  • UK GAAP: turnover

what is inventory in IFRS vs UK GAAP

• IFRS = inventory

• UK GAAP = stock

what are receivables in IFRS vs UK GAAP

• IFRS = trade receivables

• UK GAAP = debtors

what are payables in IFRS vs UK GAAP

• IFRS = payables

• UK GAAP = creditors

what is irrecoverable debt in IFRS vs UK GAAP

• IFRS = irrecoverable debt

• UK GAAP = bad debt

what is allowance for receivables in IFRS vs UK GAAP

• IFRS: allowance for receivables

• UK GAAP: provision for doubtful debts

PPE in IFRS vs UK GAAP

• IFRS: PEE

• UK GAAP: tangible fixed assets

non-current assets in IFRS vs UK GAAP

• IFRs = non-current assets

• UK GAAP = fixed assets

UK GAAP balance sheet structure

• IFRS: assets - liabilities = equity

• UK GAAP: fixed assets + current assets - current liabilities - long-term liabilities = net assets

• bottom half: share capital + reserves + retained profits

profit and loss structure for UK GAAP

• turnover - cost of sales = gross profit

• - expenses = operating profit

• ± interest = profit before tax

• - tax = profit after tax

• carrying amount

• finance costs

• income tax expense

in UK GAAP

IFRS	UK GAAP
Carrying Amount	Net Book Value
Finance Costs	Interest Payable
Income Tax Expense	Taxation Expense

what is UK GAAP made of

• UK accounting standards

• Company law

documents required in financial statements according to company law

• profit loss account

• balance sheet

• director’s report

• an auditor’s report

cash and cash equivalent in UK GAAP

• IFRS: cash and cash equivalents

• UK GAAP: cash at bank/ in hand

retained earnings in UK GAAP

• ifrs = retained earnings

  • UK GAAP = retained profits

non-current liabilities in UK GAAP

creditors falling due in more than 12 months

loan notes in UK GAAP

debentures = uk gaap

loan notes = ifrs

current liabilities

uk gaap = credits falling due in less than 12 months