+353 (0)1 411 0000 frs@frs102.com
Select Page

Section 8: Notes to the Financial Statements

Summary

Section 8 describes the principles underlying the information that is to be presented in the notes to the financial statements.

What is new?

Section 8 requires a note to be included in the financial statements detailing the judgements and estimates that management have made in applying the accounting policies, and that have the most significant effect on the amounts recognised in the financial statements. This was not a requirement under old GAAP (FRS 18).

What is different?

Section 8 requires a specific statement that the financial statements that have been prepared in compliance with FRS 102. Old GAAP was not as prescriptive.

What are the key points?

The section requires systematic presentation of information not presented elsewhere in the financial statements in, as well as information on the:

  • basis of preparation;
  • specific accounting policies;
  • changes in estimates or changes in accounting policies;
  • explanatory notes for items presented in the financial statements;
  • judgements made in applying the accounting policies; and
  • key sources of estimation uncertainty.

The notes are required to include a specific statement that the financial statements have been prepared in compliance with FRS 102.

What do accountants need to do?

Be aware of the additional requirements under FRS 102 so that the notes to financial statements are prepared in compliance with the standard.

Review the client portfolio to identify companies where significant judgements may need to be used in applying accounting policies and help clients with wording for the disclosures on these judgements and estimates of management.

What do companies need to do?

Be aware of the additional requirements under FRS 102 so that the notes to financial statements are prepared  in compliance with the standard.

Assess whether any judgement and estimates are required to be disclosed in accounting policies and determine the wording so as to comply with Section 8.