A Practical Guide to UK Accounting and Auditing Standards by Collings Steve;

Author:Collings, Steve;
Language: eng
Format: epub
Publisher: Bloomsbury Publishing Plc
Published: 2018-08-15T00:00:00+00:00

Scope of UK GAAP

FRS 102

16.2The scope of Section 23 is outlined in paragraphs 23.1 to 23.2A.

Focus

Paragraph 23.2A was removed as part of the triennial review of the standard which completed in December 2017 and is now paragraph 23.2(h) in the March 2018 edition of FRS 102.

Section 23 applies to the accounting for revenue which arises from the following:

(a)the sale of goods;

(b)the rendering of services;

(c)construction contracts where the reporting entity is the contractor; and

(d)the use by others of entity assets which yield interest, royalties or dividends.

While Section 23 deals with: (a) the sale of goods, and (b) the rendering of services, some entities do a combination of both in a single contract with a customer. For example, a company may sell software and then provide a support service which is renewable by the customer on an annual basis. FRS 102 provides no guidance as to how these should be separated, nor does the standard provide guidance on how to distinguish between a contract that is for goods and a contract for services. IFRS 15 does deal with this issue and it may be that some entities reporting under FRS 102 refer to that standard for guidance in this area.

The table below outlines those areas which are not dealt with by FRS 102:

Section 23 does not apply to:

Relevant applicable section or standard:

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