ASB: global SME standards must comply with EU

Ian Mackintosh, ASB chairman

Ian Mackintosh, ASB chairman

The UK accounting rule-maker might need European approval to bring in global
standards for small and medium-sized businesses, despite a lack of enthusiasm
for the new standards in Brussels.

The Accounting Standards
said it is looking into whether new global accounting rules for SMEs
will comply with the EU’s directives.

Ian Mackintosh, ASB chairman, said the board had begun a project exploring
whether SME legislation would be compatible with the EU’s fourth and seventh
directives, which provide frameworks for annual and consolidated accounts of
private companies.

The EU is understood to be conducting its own research into the issue as
member states consider the standards for SMEs, which are estimated to make up
more than 95% of businesses.

‘Whatever we adopt will have to apply,’ Mackintosh said. ‘We are doing our
own research on the compliance with the fourth and seventh directive and we
understand the European Commission is doing some work.’

He said there are small details that might need to be changed, but he said so
far, ‘we haven’t discovered anything that alarms us’.

The EU has not shown great enthusiasm for global SME accounting rules. EU
Commissioner Charlie McCreevy is taking a wait-and-see approach to the standard
which was released globally on 9 July.

The ASB is eager to begin using the standards which may result in UK GAAP
eventually being phased out of the accounting lexicon.

Mackintosh said a consultation paper would be released this month with
submissions closing in February 2010.

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