News in Brief - 3 June
Late payment campaign takes off Accountancy Age’s Late Payment campaign, launched last week, has already attracted a wide variety of responses across industry. Colin Hubbard, head of finance at Bolton Institute, called for public-sector organisations to take the lead in good payment practice by insisting their suppliers provide evidence that they comply with the Late Payment Act, when applying for a contract. One CIPFA member blasted the payment record of companies like Rentokil Initial and House of Fraser. ‘Why do large companies like Rentokil and House of Fraser take such pride in being late payers?’ he asked.
Diana fund fees attacked Publication of the Diana, Princess of Wales Memorial Fund accounts has provoked controversy over the costs of its administration and professional advice. Among firms named was the charity’s auditor, PricewaterhouseCoopers, which earned £417,000 from the fund for its work. Although PwC gave a 40% discount for its services, it still charged the fund’s trading companies full-price. The bulk of the £2.5m administrative costs was consumed by solicitor Mishcon de Reya which was paid £1.19m.
Big charities beat gloom Many of the largest charities are resisting the financial strain affecting the sector as a whole, according to a survey published this week. The Barclays-NGO Finance Charity 100 index reveals annual growth in income is a healthy 8.6%. But it warns a measure of pessimism may be necessary.
Call for micro recognition The English and Scots ICAs this week urged the government to recognise a new category of ‘micro company’. The proposal, which would create a new reporting framework for almost half a million companies turning over less than £350,000, was outlined in ‘Getting into Shape’, a joint submission to the Department of Trade and Industry’s company law review. Under the joint framework, ‘micro’ companies would have minimal reporting obligations under the law, while other small limited companies would have to file additional information within seven months of their year-ends.
Kingfisher’s new deal Retail group Kingfisher devised a new transaction category in its accounts for the year to 31 December 1998. The company transferred its 100% holding in B&Q to French company Castorama in exchange for a 57.9% holding in the enlarged group. Rather than accounting for it as an acquisition or merger, Kingfisher defined the transaction as an ‘exchange of assets’. Instead of capitalising some £146m of negative goodwill, Kingfisher credited the amount as a ‘non-distributable reserve arising’ from the deal. Full story in Company Reporting
IAS 10 alters dividend rules The International Accounting Standards Committee has ruled that dividends proposed or declared after the balance sheet date should not be recognised as a liability at that date. The new version of IAS 10: ‘Events After the Balance Sheet Date’ requires companies to disclose such dividends as a separate component of equity or in notes to the financial statements. IAS 10 will apply from 1 January 2000.
Tax revamp is ignored Around 80% of growing companies are unaware of the new self-assessment and payment on account regulations, according to Deloitte & Touche. Companies face being caught out by overhauls to the tax system, the firm said.
Unfit bosses on the rise The number of company directors branded unfit to run a business and banned has trebled in four years, according to the National Audit Office. In its report on the Insolvency Service, the NAO said those disqualified by UK courts rose from 399 in 1993/1994 to 1,267 in 1997/1998.