What is FRED 82? What is changing? Is now the time to start preparing for the arrival of ‘FRED’ 82?
FRED 82 has been on the radar for some time, but it is apparent that as of yet business owners have not yet truly grasped the potential impact of its arrival on their business.
Some of the questions relating to FRED 82 that business owners impacted need to consider include:
Have you considered which of your agreements or contracts will be influenced and to what extent?
Have you identified all your lease agreements and understood the details fully?
As business advisors and auditors we understand that delving into these areas requires considerable time and effort, but establishing a clear plan and pulling together a team to assist is crucial for seamlessly integrating the new standards.
We asked Mohammad Sakib, Audit Partner, to explain the implications of FRED 82 and answer a couple of related questions. We asked Mo, what is ‘FRED’ 82? And when will FRED 82 come into effect?
Mo explained “the Financial Reporting Exposure Draft 82 (‘FRED 82’) was unveiled by the Financial Reporting Council (FRC) in December 2022 and it outlined significant alterations to the current FRS 102 standard. These changes primarily entail aligning with IFRS 15: Revenue from Contracts with Customers and IFRS 16: Leases.
Following the conclusion of the consultation phase which ended on 30 April 2023, the FRC is now in the finalisation stage, with the standard being ready for release in the first half of this year (2024).
FRED 82 is anticipated to become effective for accounting periods starting on or after 1 January 2026 and whilst 1 January 2026 may still be in the distant future preparations involving data collection, accounting assessments, and system and tool implementations need to commence well ahead of time”.
If you would like to discus the implications of FRED 82 on your business please contact us, Mohammad Sakib or Steve Johnson our Head of Audit would be happy to answer any questions you may have. They can be contacted on 020 7870 9050.
