PracticeConsultingAccounting Standards – DTI considers IAS law

Accounting Standards - DTI considers IAS law

The Department of Trade and Industry this week confirmed it was considering formal recognition of International Accounting Standards as part of its company law review.

In recent weeks, observers say the European Commission has raised the profile of international standards by recommending that EU member countries enact legislation that would require companies to adopt them.

A DTI spokeswoman confirmed discussions had taken place with Brussels but said any decision on IASs would have to wait until the company law review was complete.

If the change were enacted, UK accounting standards would apply, but companies seeking cross-border listings could prepare and file accounts in the UK using IASs.

France, Germany and Italy have all passed laws permitting the use of ‘internationally accepted standards’, but the European Commission is now understood to be recommending a more explicit wording.

The International Accounting Standards Committee board broadened the scope of ED62 last week at a meeting in Zurich. The standard for financial instruments and derivatives will apply to all enterprises, not just listed companies, the board decided.

It also changed the classification of loans and receivables, so they can be measured at their amortised value rather than with the fair value techniques recommended for other financial instruments.

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