FRS 109 and FRS 115 are effective for reporting periods starting on or after 1 January 2018 with early application permitted.
(1) FRS 109 Financial Instruments
FRS 109 Financial Instruments replaces FRS 39 Financial Instruments: Recognition and Measurement.
FRS 109 consists of three parts: classification and measurement, impairment and hedge accounting. It sets out the requirements for:
(a) recognition and measurement of financial assets, financial liabilities and some contracts to buy or sell non-financial items;
(b) the impairment requirements relating to the accounting for an entity’s expected credit losses on its financial assets and commitments to extend credit; and
(c) the new requirements on hedge accounting.
However, FRS 109 retains the requirements in FRS 39 for the derecognition of financial assets and financial liabilities.
(2) FRS 115 Revenue from Contracts with Customers
FRS 115 establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. FRS 115 provides a single, principles based five-step model to be applied to all contracts with customers.
FRS 115 Revenue from Contracts with Customers replaces:
(a) FRS 11 Construction Contracts;
(b) FRS 18 Revenue;
(c) INT FRS 113 Customer Loyalty Programmes;
(d) INT FRS 115 Agreements for the Construction of Real Estate;
(e) INT FRS 118 Transfers of Assets from Customers; and
(f) INT FRS 31 Revenue – Barter Transactions Involving Advertising Services.
Source: ASC, 12 January 2018