The EU's IAS Regulation which saw listed groups in the EU transition to IFRS in 2005 overhauled financial reporting for those entities affected. In 2012 and 2013 the Financial Reporting Council (FRC) revised financial reporting standards for the United Kingdom and Ireland. The revisions will fundamentally reform financial reporting under UK GAAP, with all of the extinct being replaced with three financial years commencing on or after 1 January 2015.
Following on from the issues of FRS 100 and FRS 101 in 2012, in March 2013 the FRC issued FRS 102, the new UK GAAP standard that is largely based on IFRS for SMEs. By adapting the IFRS for SMEs to form the basis for new the UK GAAP, the UK will operate under one consistent, international accounting framework. IFRS for listed groups and a choice of IFRS and an IFRS based financial reporting framework for all other entities.
The FRC has also introduced a reduced disclosure framework for 'qualifying entities' which recognises that it is cost effective for a group to maintain accounting records using consistent accounting policies, but that the disclosure requirements in IFRS give rise to reporting costs that may not be balanced by benefits to the users of the financial statements.
Although it is not mandatory in the Isle of Man, the new FRC proposals will be recognised as best practice and adopted by many Isle of Man companies for financial reporting purposes.