News in Brief - 29 April
No to merger accounting
The US Financial Accounting Standards Board last week announced its intention to ban merger accounting – which it calls ‘pooling of interests’ – from next year. The proposals would force an acquiring company to account for the assets of the target company and show any difference from the purchase price as goodwill on the balance sheet, which would be written off over a specified period. FRS 6 allows merger accounting in the UK in specific circumstances.
Assurance split proposed Auditors could soon offer two levels of assurance in their comments: a ‘high’ assurance expressed in the form of an opinion, or a conclusion representing ‘moderate’ assurance. The proposals are being circulated for comment by the International Auditing Practices Committee, part of the International Federation of Accountants. The committee is particularly interested in practical issues and alternative proposals.
Call for EC clarification The European accountants federation, FEE, has called on the European Commission to clarify its stance on conflicts between its accounting directives and international accounting standards. FEE has identified almost 30 areas of conflict, including restructuring provisions, reverse acquisitions, scope of consolidation and fair value accounting.
English ICA’s euro warning UK businesses will be affected by at least one euro-related tax issue, whether or not the UK decides to join the single currency, according to the English ICA’s latest euro guidance. Some smaller companies operating exclusively in the UK may escape, but ‘failure to address the issues could leave businesses seriously underprepared’, the institute said.
Increase in receiverships Company receiverships increased during the first quarter of this year by more than 20% compared to the last quarter of 1998, according to a new survey from KPMG Corporate Recovery. It concluded that despite interest rate cuts and a buoyant stock market, international developments have led to a sharp deterioration in prospects for the world’s economy.
Increase in receiverships The British Standards Institution this week published an amended version of BS 7799, the standard for information security management. It covers issues such as outsourcing and e-commerce and is accompanied by a certification scheme, c:cure. Copies are available for £94 from the BSI on 0181 996 9001.
Tories ‘not accountants’ Shadow chancellor Francis Maude has denied that his is the party of accountants. Determined to display the human face of the new Tories, he confessed: ‘In government we sometimes sounded as if we were only interested in markets and accountancy.’ He deepened the chasm in Conservative ranks by declaring: ‘Someone suffering from cancer is a patient who wants to be cared for, not a customer within the internal market.’
Government invests The second round of the government’s invest to save bidding round will be worth £230m over the next three years, chief secretary to the Treasury Alan Milburn said this week. Joint emergency services, call centres and an online property conveyancing database are among the projects supported under the first round of the initiative.
Support for Wales urged The new Welsh Assembly should provide more resources to support small and medium-sized business and improve regulation in the principality, according to a manifesto from the Chartered Accountants for Business in Wales group. CABW is also calling for the assembly, which will be elected on 6 May, to commission research to lift barriers to growth in Wales and improve small business access to finance.