Y2K: too late
The Accounting Standards Board’s Urgent Issues Task Force abstract covering the disclosure of preparations to tackle the problems of computers that cannot cope with the millennium date change, which is published today, is ‘too little, too late’, claimed one of its authors.
The abstract represents the first legal requirement for UK businesses to prepare computers for the year 2000. Company accounts for financial years ending on or after 23 March will have to disclose the total estimated costs incurred on year 2000 remedial work and provide discursive information about the entity’s plans for further work and the risks and uncertainties associated with the problem, either in an operating financial review or director’s report.
The UITF also published an abstract requiring similar accounting treatments for issues arising from the introduction of the single European currency.
After failing to agree a consensus on its year 2000 advice last November, the ASB taskforce came under pressure from the Department of Trade and Industry and accountancy regulators to agree guidance as quickly as possible.
But Deloitte & Touche national audit technical partner Martyn Jones, a taskforce member, acknowledged the abstract represented ‘too little, too late’. Because of the three-month delay, the abstract will miss December 1997 year-ends.
And because the abstract proposes disclosure in operating financial reviews, it is not enforceable, he explained. ‘Our preference is to see disclosure made in the director’s report because that ensures the matters are given sufficient attention,’ said Jones.
As part of its presidency of the European Union, the government is convening a conference in May to address the millennium bug.