The European Commission is to investigate the impact on dividends for companies switching to IFRS.
Worries that changes to company accounts would render some companies unable to pay dividends to shareholder were acknowledged by the EC’s Accounting Regulatory Committee, which has now commissioned a study on non-cash deficits brought onto the accounts by IFRS.
Under EU law, companies are only able to pay dividends if they have positive distributable reserve, but under IFRS those reserves can be severely impacted by items such as pensions.
The ARC also gave a favourable opinion on the International Accounting Standards Board’s revised version of the fair value option in IAS39. The way is now open to it being included in the EU’s version of the standard, removing one part of the infamous carve-out.
Simon Wright of CareersinAudit.com discusses how an effective cyber defence force is critical to businesses worldwide and how internal auditors can make the transition to a new career in cyber security
The FRC has said that the investigation will 'consider, but not be restricted to, issues regarding misstated accounting balances'
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Stephen Grayson to join the audit department in Manchester