The FRC has shared its revisions to FRS 102.
Nothing life changing but a few that professional service firms should focus in on. Key one for me is recognition of separate intangibles and unfortunately the guidance may well lead to less consistency.
I understand the reason for the change am not sure this approach is ideal. As ever - transparent disclosure and additional narrative will be useful to inform the user of the accounts.
The FRC propose to allow an entity to choose to recognise fewer types of intangible assets separately from the goodwill arising on a business combination. Benefits: Entities might welcome the cost savings (internal and external) from not having to obtain valuations of certain intangible assets. Challenges: This proposed amendment might confuse less experienced preparers. We are concerned that the proposals will introduce greater inconsistency in the reporting business combinations. Our view: We have alternative recommendations. In our view, entities should be able to make the following accounting policy choices consistently to all combinations: - either recognise intangible assets separately from goodwill (irrespective of class); or - leave all intangible assets subsumed in goodwill and instead disclose what factors have led to the recognition of goodwill.