IFRS decision spells trouble for taxman

Link: Profession welcomes extension of IFRS

Although moves to harmonise IFRS with UK GAAP are underway, the process is unlikely to be completed by the time the new standards are introduced, leaving little time to learn another set of accounting standards.

‘The two sets of people who will be most affected by this decision are bank managers and the taxman,’ said Mary Keegan, chairman of the UK Accounting Standards Board. ‘These two groups will have to learn to work with two different sets of standards.’

Others agree that training will be a key issue as the country moves towards the 2005 deadline.

‘There will be significant training issues for those using UK GAAP in getting used to IFRS and I suspect it will be quite traumatic,’ said Ian Wright, senior partner at PricewaterhouseCooper’s global corporate reporting group.

The move to allow unlisted companies to use IFRS has been broadly approved by the profession, although some have pointed out that with UK GAAP in a state of flux, changes cannot be avoided.

‘Those companies opting to continue with UK GAAP will still face the challenge of dealing with many of the accounting requirements of IFRS,’ said Andrew Vials, IFRS partner at KPMG. ‘Do not expect a status quo in accounting standards for companies in the next few years.’

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