SMEs lobby for deferral on IFRS compliance
Smaller listed companies are to demand a two-year stay on compliance with International Financial Reporting Standards.
Link: IAS special report
The Quoted Companies Alliance, a pressure group that lobbies for the interests of businesses outside the FTSE 350, is drafting a letter to the EU’s internal market commissioner, Frits Bolkestein, insisting on a delay. The letter will demand smaller companies, without resources to meet the deadline, be given a deferral. ‘Our concern is the programme is running behind,’ said John Pierce, QCA chief executive.
Tom Simmons, chairman of the accounting standards working group at the QCA, said the impending standards were putting ‘an enormous strain’ on smaller companies. He hopes to gain the support of the other major UK pressure groups such as the Confederation of British Industry and the Institute of Directors. As Accountancy Age went to press, the letter was being looked over by QCA’s European partners before being sent to Bolkestein.
Paul Clarke, finance director of Fullers Smith & Turner plc, the brewer, said smaller companies should be offered a deferral. ‘The big boys should go first, get them to crack all the problems and let us follow on afterwards,’ he added.
Clarke’s biggest worry is that he still doesn’t know the presentational format the standards will take, and said he had understood from ‘informed sources’ that setting the format will be left to individual geographical areas rather than the IASB. ‘The feedback we’re getting is we’re not sure who is going to describe the format of the reporting, and we don’t think it will be the IASB,’ he said. ‘My opinion is that the IASB will concentrate on the big issues and leave the tidying up to others.’
With big business leaders lobbying Downing Street this week on red tape, some experts believe the 2005 deadline will contribute to the tendency among smaller listed companies to de-list in order to avoid compliance issues associated with being a public company.