Business - Boots slates ASB share rules
Boots, the retail chemist which earlier this year broke with standard practice to account for shares granted to its employees, this week criticised the Accounting Standards Board for backing down on changes that would have reßected the true costs of such schemes in company accounts.
Accounting treatments for employee share schemes will remain unchanged after the Urgent Issues Task Force withdrew proposed amendments to two abstracts last week.
Rather than treating shares held in an ESOP as an asset, the proposed amendments to two UITF abstracts would have required the purchase to be reported as a reduction in shareholders’ funds. But the ASB decided to withdraw them and tackle employee share ownership in a broader accounting for equity project.
In a move that was generally welcomed by analysts, Boots decided in February to show the cost of shares purchased for its employee scheme in its profit and loss account.
Boots group treasurer Michael Bunting said the proposed revisions ‘didn’t go far enough’ and was ‘surprised to see the ASB back down’.