• Case Studies
• 03.03.2014 07:00 pm

When the Circle Housing group was confronted with the complex new demands of reporting under FRS 102, the treasury team decided to research, select and implement a new technology solution, as the best approach for achieving compliance. A policy decision was taken to adopt hedge accounting, to minimise any  profit and loss (P&L) volatility resulting from the group’s derivative operations. This case study describes how the ensuing project was organised and executed, to facilitate FRS 102 compliance, in an automated end-to-end workflow relating to hedge accounting processing, analysis, reporting and interfacing.  Financial Reporting Standard (FRS) 102 is a new accounting standard generally known as the new UK and Irish Generally Accepted Accounting Principles (GAAP) and under which Circle Housing group will have to report for its financial accounts on and after 1 January 2015.   This standard radically changes the statutory reporting requirements and hence the underlying accounting treatment for smaller UK companies and for housing associations. Under existing accounting regulatory regime of UK GAAP, Circle is not presently required to include any financial derivatives disclosures in its accounts. Accordingly the conversion of reporting standards to an IFRS compliant standard presented Circle with both a new challenge and opportunity.