The Financial Reporting Council (FRC) has issued FRED 84 Draft amendments to FRS 102 The Financial Reporting Standard, applicable in the UK and Republic of Ireland.
The amendments cover supplier finance arrangements, proposing to introduce new disclosure requirements. These would provide users of financial statements with additional information about an entity’s use of supplier finance arrangements and the effect of such arrangements on the entity’s financial position and cash flows.
The FRC said in a statement on its website: “In May 2023, the International Accounting Standards Board (IASB) published Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7), which added disclosure requirements in respect of supplier finance arrangements to both IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures.
“The FRC has considered whether similar proposals are appropriate for FRS 102, particularly Section 7 Statement of Cash Flows, and has developed FRED 84 which is based on the IASB’s amendments to IAS 7. No disclosure requirements based on those introduced into IFRS 7 are proposed as they relate to the requirements on liquidity risk, a topic which is not specifically addressed in FRS 102 other than for financial institutions. As qualifying entities and small entities are not required to comply with the requirements of Section 7 of FRS 102, they may not be impacted by the proposed amendments.”
Comments on FRED 84 are requested by 31 December 2023. The FRC expects to finalise the proposed amendments in the first half of 2024, alongside the amendments arising from the current periodic review of FRS 102 and other FRSs.
