FRS 100 is the standard that tells a UK entity which accounting framework to use for true and fair financial statements. Group accounts of a parent with securities on a UK regulated market must use UK adopted IFRS; a micro entity may use FRS 105; a qualifying member of a group may use FRS 101 for its individual accounts; and everyone else uses FRS 102 or chooses UK adopted IFRS.

What does FRS 100 do?

FRS 100 Application of Financial Reporting Requirements contains no accounting rules of its own. Paragraph 1 says its objective is to set out the applicable financial reporting framework for entities preparing financial statements under the legislation, regulations or standards of the UK and Republic of Ireland. Paragraph 2 applies it to financial statements intended to give a true and fair view, so it covers companies, LLPs, charities and other entities whose accounts must be true and fair, not just companies. The current edition was issued in September 2024 and reflects the Periodic Review 2024 amendments, effective for periods beginning on or after 1 January 2026 (paragraph 10E).

The standard works alongside company law. Section 395(1) of the Companies Act 2006 lets a company prepare individual accounts either as Companies Act individual accounts under section 396 or as IAS individual accounts under UK adopted international accounting standards. Section 403 does the same for group accounts. FRS 100 then says which FRC standard is used for Companies Act accounts.

How does the decision work, step by step?

Paragraph 4 of FRS 100 and Appendix II paragraphs A2.4 and A2.5 produce this order:

  1. Is IFRS compulsory? Section 403(1) requires the group accounts of a parent company whose securities are admitted to trading on a UK regulated market at its balance sheet date to be prepared under UK adopted international accounting standards. Paragraph 1.3 of FRS 102 confirms that an entity required by law to prepare consolidated accounts under adopted IFRS must do so.
  2. Is the entity eligible for FRS 105, and does it want to use it? Paragraph 4(a) allows an entity eligible for FRS 105 to use it. Micro entity status is set by sections 384A and 384B of the Act.
  3. Otherwise, paragraph 4(b) requires FRS 102, adopted IFRS or, for the individual accounts of a qualifying entity, FRS 101.

Two legal limits sit across all of this. Section 395(2) requires the individual accounts of a charitable company to be Companies Act accounts, and section 403(3) does the same for group accounts of a charitable parent, so a charity cannot choose IFRS. And footnote 5 to paragraph 4 confirms that accounts under FRS 101, FRS 102 or FRS 105 are all Companies Act accounts, so they must also comply with the Act and the relevant accounts regulations.

Who can use FRS 105?

Under section 384A a company is a micro entity if it meets two of three conditions: turnover not more than £1 million, balance sheet total not more than £500,000 and not more than 10 employees, figures that took effect on 6 April 2025. A change in status takes effect only if it happens in two consecutive years (section 384A(3)). A parent qualifies only if its group is also small.

Section 384B excludes companies outside the small companies regime, investment undertakings, financial holding undertakings, credit institutions, insurance undertakings and charities. Section 384B(2) also excludes a parent preparing group accounts and a subsidiary whose accounts are included in consolidated group accounts for the year. A trading subsidiary of a group that consolidates it therefore cannot use FRS 105, however small. Footnote 2 to paragraph 4 says turnover and balance sheet total for this test are measured under FRS 105, not FRS 101 or FRS 102. See FRS 105 and micro entity accounts.

Who qualifies for FRS 101?

FRS 101 Reduced Disclosure Framework lets a group member apply the recognition and measurement rules of UK adopted IFRS with fewer disclosures. The FRS 100 glossary defines a qualifying entity as a member of a group whose parent prepares publicly available consolidated financial statements intended to give a true and fair view, in which that member is included. Charities are excluded, as are insurers that apply Schedule 3 to the accounts regulations and have contracts within IFRS 17.

Conditions and limits in FRS 101 itself:

  • it is available for individual accounts of subsidiaries, intermediate parents and ultimate parents (paragraph 1), but not for consolidated accounts (paragraph 3);
  • FRS 101 accounts are Companies Act accounts, not IAS accounts (paragraph 4A), and adopted IFRS is amended where needed to comply with the Act (paragraph 5(b));
  • the notes must give a brief summary of the exemptions taken and the name of the parent whose consolidated accounts include the entity, and where they can be obtained (paragraph 5(c)).

The earlier requirement to notify shareholders has been deleted from both FRS 101 (paragraph 5(a)) and FRS 102 (paragraph 1.11(a), removed with effect from periods beginning on or after 1 January 2016 under paragraph 1.17).

What if the group uses FRS 102 rather than IFRS?

A subsidiary in a group reporting under FRS 102 can stay on FRS 102 and still cut disclosures. Paragraphs 1.8 to 1.12 of FRS 102 give a qualifying entity exemptions, including from the cash flow statement, certain revenue disclosures and, where equivalent disclosures are in the consolidated accounts, certain financial instrument and share based payment disclosures. Paragraph 1.11 requires the same two notes as FRS 101. A financial institution cannot take the financial instrument exemptions (paragraph 1.9), and the exemptions are not available in consolidated accounts (paragraph 1.10).

A small company using FRS 102 may instead use the presentation and disclosure regime in Section 1A; see FRS 102 Section 1A. Section 1A changes disclosures, not the framework.

Does the whole group have to use the same framework?

Section 407 requires the directors of a parent to ensure that the individual accounts of the parent and each subsidiary use the same financial reporting framework, unless in their opinion there are good reasons not to. FRS 100 paragraph A2.16 notes the exceptions: the rule does not apply where the parent does not prepare group accounts, charity subsidiaries need not match, and where the parent prepares IAS group and individual accounts only the subsidiaries need be consistent with each other. Paragraph A2.17A says the exclusion of some insurers from FRS 101 may be a good reason for different frameworks. Consolidation itself is covered in FRS 102 consolidated accounts.

Can an entity switch frameworks?

Moving to IFRS is open to most entities other than charities, but moving back is restricted. Under section 395(3), once a company has prepared IAS individual accounts, later accounts must also be IAS accounts unless there is a relevant change of circumstance. Section 395(4) lists these: becoming a subsidiary of an undertaking that does not prepare IAS individual accounts, ceasing to be a subsidiary, or the company or its parent ceasing to have securities admitted to a UK regulated market. Section 395(4A) separately allows a change back to Companies Act accounts for any other reason, provided the directors have not made such a change in the previous five years. Section 403(4) to (5A) apply the same rules to group accounts.

Paragraph 11 of FRS 100 sets the transition rules. A move to adopted IFRS applies IFRS 1. A move to FRS 101 applies paragraphs 6 to 33 of IFRS 1, but without the opening balance sheet otherwise required. A move to FRS 102 or FRS 105 follows the transition section of that standard. Paragraph 12 deals with an entity moving from adopted IFRS to FRS 101 without reapplying IFRS 1, with reconciliations if the effect is material.

What does this look like for a typical group?

Illustration only. A UK plc with shares on a UK regulated market owns three UK subsidiaries.

Accounts Framework options
Plc consolidated accounts UK adopted IFRS only (section 403(1))
Plc individual accounts UK adopted IFRS, FRS 101 or FRS 102
Trading subsidiary FRS 101, FRS 102 with reduced disclosures, or UK adopted IFRS
Small property holding subsidiary As above, but not FRS 105, because it is included in the consolidation (section 384B(2)(b))
Charitable subsidiary FRS 102 only: charities cannot use IFRS (section 395(2)), FRS 101 or FRS 105

Where a SORP applies, paragraph 6 of FRS 100 requires the accounts to name it and state whether they comply, explaining any departures.

What mistakes come up most often?

  • Assuming a tiny group subsidiary can file micro entity accounts when it is consolidated.
  • Using FRS 101 without the notes on exemptions taken and the parent’s consolidated accounts.
  • Adopting IFRS for a subsidiary without considering the restrictions on returning to Companies Act accounts.
  • Mixing frameworks across a group without recording the directors’ good reasons under section 407.
  • Omitting the statement of compliance that paragraph 9 of FRS 100 requires for FRS 101 and FRS 102 accounts.

For an overview of the main standard, see FRS 102 explained.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.