FRSSE shirks need for Y2K disclosure
The Accounting Standards Board has failed to force small businesses to disclose their preparations for the year 2000 and the euro, warned critics of the revised ‘Financial Reporting Standard for Smaller Entities’, published on 10 December.
For financial years ending after 23 March next year, companies will be required to disclose the costs of modifying systems for the year 2000 and the euro as exceptional items. Small businesses will not, however, need to disclose the precautions they were taking.
‘That’s a mistake,’ said ACCA technical director Richard Martin. ‘It’s a matter of legitimate interest for third parties.’
ASB project manager Hannah King said the ASB tried to bring IT issues to the fore by mentioning them in FRSSE, but the standard was meant to set out accounting principles rather than deal with short-term contingencies.
ACCA and other commentators also raised concerns that, by attempting to simplify new rules for valuing impairment of fixed assets and goodwill, FRSSE made them more onerous for small businesses.
King said the only restriction for small businesses was a 20-year lifespan limit for goodwill when a company was acquired.
‘There’s not much point in having FRSSE if you’re going to put the FRS in lock, stock and barrel,’ said King.