Under UK GAAP, what does FRS 101 provide for financial disclosures?

FRS 101, which stands for Financial Reporting Standard 101, is designed to offer a simplified framework for companies reporting under UK GAAP while still aligning closely with the principles outlined in International Financial Reporting Standards (IFRS). One of the primary benefits of FRS 101 is that it allows entities to take advantage of several disclosure exemptions that are available under IFRS, particularly those related to standards such as IFRS 7 (Financial Instruments: Disclosures) and IFRS 13 (Fair Value Measurement).

This means that while companies need to present financial statements that reflect their circumstances accurately, they can omit certain disclosures that would otherwise be required under full IFRS. This greatly reduces the compliance burden for smaller companies or subsidiaries preparing their accounts in line with FRS 101.

The other options do not accurately capture the essence of FRS 101. Full disclosures under all circumstances would contradict the purpose of the standard, which is to provide exemptions to ease reporting requirements. Cumulative accounting adjustments or optional reporting extensions do not align with the standard's core focus on providing a streamlined approach while still ensuring relevant information is disclosed.