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As we head towards the end of 2015, many organisations are beginning to produce their first financial statements under FRS 102 and are noticing that the reported profit figure may well look different under FRS 102 compared against old UK GAAP.

Firstly, under old UK GAAP, all unrealised items were reported in the separate Statement of Total Recognised Gains and losses. Under FRS 102 there is the option to present a Statement of Total Comprehensive Income that essentially combines the STRGL with the profit and loss account.

Secondly, FRS 102 has 35 sections. Some of the requirements are based on old UK GAAP, some on IFRS and some are a hybrid sitting somewhere between the two. For some entities reported profit will increase, for others reported profit will decrease.

As accountants it is important that we understand the impact that FRS 102 will have on our reported profit and that we communicate this impact to both financial and non-financial stakeholders of the organisation so that they appreciate the differences between changes in performance and changes in accounting requirements.

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