UK agribusiness companies may be unable to adhere to controversial new international accounting rules, because the rules – due to be launched next week – are expected to contravene the UK Companies Act.
The new International Accounting Standards Committee agribusiness exposure draft will be the culmination of several years’ discussion regarding the measurement of biological assets, such as animals, at fair value and how this is affected by physical change.
But UK standard setters and specialist accountants have warned that farms and other agribusinesses following the standards, may fall foul of the requirements of company law.
Accounting Standards Board technical director Alan Cook explained that there is currently no equivalent standard in the UK that may encourage accountants to follow the IAS.
But he added that international standards are by definition not specific to any one country and there are certain rules in the Companies Act which need to be observed, such as valuation of stock.
Deloitte & Touche national agricultural partner Vincent Hedley Lewis agreed the new proposal could cause problems. He added that the proposals had changed little since the idea was first floated and questioned the IASC’s ability to reach a conclusion. ‘We look forward to seeing with the IASC if it is possible to agree on the issue, but we are aware of how this might conflict with the standards affecting the UK.’
But Paul Pacter, IASC international accounting fellow and project manager for the proposal, said: ‘This will be very important to developing and larger countries, where agriculture is a major part of the economy.’
The draft will be launched alongside a second proposal on investment properties that will apply to company properties which are not occupied, but are used for investment returns. There is a UK standard which applies in this case.
Just one half of UK practices have implemented a pricing structure around auto enrolment implementation and advice - with many suffering increased costs
Deloitte's north-west Europe foray; BDO, Smith & Williamson investment paths; Shelley Stock Hutter; and Wilkins Kennedy discussed by editor Kevin Reed on our Friday Afternoon Live broadcast
Accountants should alter their perspective on auto-enrolment to maximise business opportunities, according to Eric Clapton.
Kevin Reed discusses whether new accountancy group Cogital can rival the Big Four...and its likely direction of travel