ASB faces opposition over approach to standards

Opposition to the reporting regime for UK and international financial
standards has reached a new level, with the ASB being told to reconsider its
approach.

Significant opposition was raised to initial proposals at a public meeting
held by the UK Accounting Standards Board.

Andy Simmonds, technical partner at Deloitte and member of the Urgent Issues
Task Force, said he had been ‘sadly disappointed’ with the direction IFRS had
taken. He argued that the standards had been ‘steered towards US GAAP’, and that
the board did not seem to listen to any constituents other than the US.

Richard Martin, head of financial reporting at ACCA, reflected the view of
many when he argued that, for the ASB to have any influence on the direction of
international standards, it would have to get involved at a very early stage.
‘At the exposure draft stage it is already too late,’ he said.

Key accounting figures from the profession, business and academia, who
attended the meeting, raised concerns over the IASB’s plan to converge with US
GAAP.

Professor Stella Fearnley of Portsmouth University said that, apart from the
small number of companies with a US listing, the benefits to the rest from the
project were not clear. She added that many of those with a listing were
currently trying to exit the market.

A large proportion of the meeting’s attendees favoured the introduction of a
system that would see full IFRS remain for all public interest entities, while
the rest would adopt the standard to come out of the IASB’s SME project, or a
version of the current FRSSE.

A similar number wanted to see the introduction of a third tier of companies,
between those using full IFRS and the SME standard, which would use a
scaled-down version of international standards.

There is no timescale for the ASB to produce a concrete plan, but chairman
Ian Mackintosh said: ‘We need to finalise the strategy pretty soon.’