Prior to applying FRS 102, Halo Hearing Solutions Limited did not make provision for accrued holiday pay. FRS 102 requires the cost of short-term compensated absences to be recognised when employees render the service that increases their entitlement. Consequently, an additional accrual of £2,104 at 31 March 2024 has been made to reflect this.
As part of our transition from FRS 105 to FRS 102, we have evaluated the impact on our financial statement relating to deferred tax.
Under FRS 105, no provision was made for deferred tax. However, FRS 102 requires the recognition of deferred tax liabilities and assets, using the balance sheet liability method. This involves recognizing deferred tax on all temporary differences between the tax base and the carrying amount of assets and liabilities in the financial statements.
The effect of this change on our financial statements is as follows:
Recognition of Deferred Tax Liabilities: We have recognized deferred tax liabilities on taxable temporary differences arising from items such as accelerated capital allowances and other temporary differences.
Restatement of Comparative Period: We have restated the comparative period to reflect the recognition of deferred tax under FRS 102. The impact on equity as of the transition date has been adjusted accordingly.
The deferred tax as of 1 April 2022 was £21,788. The movement to 31 March 2023 was £16,837. The balance as of 31 March 2023 was £38,625, the movement in this year was £3,735. The balance as of 31 March 2024 was £34,890.