FRS 20 not to be changed for subsidiaries

News Article - 23 May 2012
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It has been announced by the Accounting Standards Board (ASB) that the Financial Reporting Standard (FRS) 20 will not be amended for subsidiary companies.

Proposals for such an amendment were originally made amid concerns that companies would be required to calculate the cost of share-based transactions for subsidiaries on a different basis to that used in financial statements.

The worry caused by this was that subsequent results would be skewed. However, ASB officials have concluded that the potential benefits in preparation stages afforded by a change in FRS 20 would not be sufficient enough to warrant the introduction of a divergence between the UK and international standards.

Currently, FRS 20 is based on the international standard IFRS 2, which the ASB has decided should be kept in line with each other.

Last month, Grant Thornton warned that larger businesses were running out of time to begin meeting the FRS 20 standard for share-based payments.

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