[Global Financial Insights] FRC Issues New Factsheets to Expand Guidance for FRS 102 Preparers

Editorial Team – [2025] 178 taxmann.com 291 (Article)

Global Financial Insights is a weekly feature for the Accounts and Audit Module subscribers of Taxmann.com. It provides you with the latest updates on financial reporting and auditing practices from across the globe. Here is this week’s financial update:-

1. FRC expands guidance with new factsheets for FRS 102 preparers

The Financial Reporting Council (FRC) has published two new factsheets to provide additional support for entities applying FRS 102. The latest publications aim to bring greater clarity to specific areas of application within accounting standards.

The new factsheets focus on the following areas:

• •  FRS Factsheet 12 “Presentation of the Financial Statements“: This factsheet outlines the presentation options available to entities applying FRS 102, including small entities. It focuses on the use of “statutory” and “adapted” formats for the balance sheet and the profit and loss account. The guidance is also relevant to the FRC’s ongoing consultation on FRED 87 – Draft amendments to FRS 102 (Adapted formats), which proposes revisions to maintain alignment with IFRS Accounting Standards. Stakeholders can submit feedback on the consultation until 10 October 2025.
  •  FRS Factsheet 13 “Going Concern Basis of Accounting for Small Companies and Micro-entities“: This factsheet is designed to assist directors of small companies and micro-entities in conducting and reporting their going concern assessments. It complements the FRC’s recently published Guidance on the Going Concern Basis of Accounting and Related Reporting, including Solvency and Liquidity Risks, which encourages proportionate, company-specific disclosures.

The FRC confirmed that, where relevant, the new factsheets also provide considerations for entities applying FRS 101 – Reduced Disclosure Framework and FRS 105 – The Financial Reporting Standard applicable to the Micro-entities Regime.

Source – Financial Reporting Council

2. IESBA issues new guidance on the use of external experts and sustainability assurance

The International Ethics Standards Board for Accountants (IESBA) has issued two new staff publications aimed at strengthening global understanding and adoption of its ethics standards on Using the Work of an External Expert and the International Ethics Standards for Sustainability Assurance™ (IESSA™), both effective from December 2026.

The publications are designed to clarify key requirements and provide practical support to professional accountants, sustainability assurance practitioners (SAPs), and other stakeholders.

• • Questions and Answers on Using the Work of an External Expert: This resource addresses common questions around when and how to engage an external expert, including evaluating competence, capabilities, and objectivity, identifying potential threats, and specific considerations under the IESSA. The guidance applies broadly across business and public practice, including assurance and sustainability engagements.
  • Proportionality of the IESSA: This publication underscores how the IESSA delivers a robust global ethics and independence baseline for sustainability assurance engagements, while remaining scalable for entities of all sizes. It particularly supports small and medium practices (SMPs) in implementing the standard and ensuring high-quality, trusted assurance.

IESBA noted that the resources may also be of value to standard setters, regulators, oversight bodies, professional accountancy organizations, educators, and other stakeholders seeking to build capacity in ethics and sustainability assurance.

Source – International Ethics Standards Board for Accountants

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