Nieuws 29 oktober 2010

IFRS SME-variant vervangt UK GAAP

De Accounting Standards Board vervangt UK GAAP door IFRS for SMEs in aangepaste vorm. Dat staat in een voorstel dat de Britse standard setter voor financiële verslaggeving vandaag heeft gepubliceerd over de toekomst van het verslaggevingsstelsel in het Verenigd Koninkrijk en Ierland.

Persbericht van de ASB:

The Future of Financial Reporting in the UK and the Republic of Ireland

29 October 2010

Proposals for a three-tier reporting framework and a simplified UK standard based on the IFRS for SMEs

The Accounting Standards Board today publishes its proposals for the future of financial reporting in the UK and Republic of Ireland. The Exposure Drafts set out proposals for a three-tier reporting framework, which aims to balance the needs of preparers and users of accounts.

The document includes an explanation of the proposals, a draft Impact Assessment and the two new proposed standards. The aims include:

• to explain to companies and other entities which set of accounting standards will apply to them; and
• to simplify UK standards into a concise, coherent and updated form.

The proposed three-tier approach, which has been developed and consulted on over the past six years, builds on the existing system. Quoted groups will continue to report under international financial reporting standards (IFRS), as adopted by the EU.

They would be joined in Tier 1 by other companies that are publicly accountable. This would apply if their debt is traded on public markets, or if they hold deposits or manage other people's money. (Some very small financial institutions would be exempt.)

The smallest companies will continue to use the simplified version of UK standards, known as the FRSSE.

Those in between would report under a new standard based on the IFRS for SMEs, which is considerably shorter and less complicated than current UK standards. The FRSME, as it would be called, would be modified to comply with UK and EU law and to ease tax reporting. It runs to about 400 pages.

The ASB is proposing a new standard because the current 2,000-page book, built up over decades, is an unwieldy and incoherent mixture of old UK standards and ones that have been partly converged with IFRS. Nevertheless, gaps remain, notably in the reporting of financial instruments. Without these changes, UK standards would in any case have had to be updated.

Basing reporting for all but the smallest companies on the international framework will reduce the training costs of accountants and the scope for auditing errors. A consistent framework should also make interpretation simpler for users of accounts, and companies will find it easier to move between tiers.

An important part of the simplification process is the proposed reduced disclosure regime, which would enable most group subsidiaries to make significant savings.

In response to feedback during previous consultations, the ASB plans to develop a standard tailored to the needs of public benefit entities such as charities. It will also retain the sector-specific statements of recommended practice (SORPs) where there is a clear need.

Change always has a cost. The draft Impact Assessment estimates the costs of transition at £78.9m. While some entities will be more affected than others, overall the ASB believes this will be recouped through the simplification of reporting for many of them. There is also potential for a reduced cost of debt.

In view of significance of the changes, the ASB is open to fundamental comments on the Draft, not just points of detail. The Board is aware that there are differing views, and one of its members has provided an alternative proposal.

David Loweth, ASB Technical Director and Board member, said:

"The exposure draft sets out the Board's proposals for the future framework for financial reporting by UK and Irish entities. In the Board's view, the proposals provide a framework targeted to meet the needs of users and preparers, but we know that there are alternative views. That's why this consultation is so important and why I would urge all constituents with an interest in financial reporting to consider the proposals and to give us your views".

The consultation period will run until 30 April 2011. It is proposed that the new framework would be effective from 1 July 2013.