SOON TO BE concluded, the Accounting Standards Board consultation on the future of financial reporting for SMEs will hopefully decide once and for all whether businesses should haul anchor and set sail for international standards, or stay in the safe harbour of UK GAAP.
The decision is highly charged, with some companies embracing the international financial reporting standards of their larger, listed peers, while others question the wisdom of abandoning serviceable UK rules for companies that are wholly domestically focused.
One expert-in-the-know has suggested the decision is more political than technical. Outside the multinationals, it is arguably better to leave standards at a jurisdictional level, allowing regulators to customise them as necessary.
After all, why drag small companies through the rigmarole of re-training, re-jigging the numbers and fulfilling the extra requirements of IFRS, when their business activity will never extend further than Dover?
Political rather than technical means it looks good to show willing when it comes to IFRS. Swinging the whole raft of companies around to meet the same international guidelines sends a strong message of support, despite the fact that only a fraction will ever put their new-found globalism to good use.
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