The Accounting Standards Board (ASB) has simplified the FRS 20 share-based payment standard in the Financial Reporting Standard for Smaller Entities (FRSSE).
After its Committee on Accounting for Smaller Entities (CASE) claimed that FRS 20 was too complicated and could lead to higher costs for smaller firms, the ASB revised its guidelines so that equity-settled arrangements now only require a disclosure approach.
"The board agreed major simplification was appropriate for FRS 20," said ASB chairman Ian Mackintosh.
'Overly complex'
Specific points made by CASE include the fact that share-based payments are not common in the small business sector, and that the requirements of FRS 20 at present are "overly complex".
Mr Mackintosh continued: "In updating the FRSSE, the ASB has fully considered the views of respondents and the needs of smaller companies and the users of their accounts.
"The board will continue to monitor closely small company financial reporting both in terms of keeping the FRSSE up-to-date and in taking forward work on the ASB's convergence strategy and the International Accounting Standards Board's SME project."
The FRSSE standard is applied to companies that qualify as 'small' under the Companies Act 1985, and other organisations that would qualify as 'small' if they were incorporated. 'Small' is defined as those firms with an annual turnover of no more than £5.6 million.
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