SME accounting should retain UK GAAP aspects
ASB looks to implement IFRS for SMEs - albeit with some UK standards thrown in
THE ACCOUNTING REGULATOR has revised proposals for future financial reporting in the UK.
The Accounting Standards Board (ASB) announced changes to its previous proposals following feedback from consultation drafts.
Currently companies fall within three tiers to make their financial reports. The largest organisations in the UK must report in IFRS, SMEs using UK GAAP and micro entities FRSSE (Financial Reporting Standards for Smaller Entities).
However, in the previous proposal the ASB announced it would axe UK GAAP and succeed it with IFRS for SMEs – causing fears of a confusing multi-tiered system.
In the latest revision of proposals it seems three tiers will remain.
However, the ASB is proposing to not widen the number of companies caught in full IFRS.
Instead, they will fall into a middle tier that sees IFRS for SMEs implemented in place of UK GAAP. The ASB has attempted to allay fears that this set of standards would be too simplistic, by incorporating some current UK standards.
The standard setter hopes to reduce current UK GAAP from 2,500 pages to 250 by introducing IFRS for SMEs. The middle tier will be known as FRS.
The exposure drafts are open to comment until 30 April 2012 with a final standard expected by the end of the year and adoption expected on 1 January 2015.
Roger Marshall, (pictured) chairman ASB, said: “In developing these exposure drafts the ASB has listened carefully to the many responses to its proposals.
“The proposals in FRED 48 now fit better with current reporting needs in the UK and Republic of Ireland and will ease its application. “