ICAEW calls for halt in convergence

Further changes in UK accounting standards, in order to bring them in line
with their international counterparts, should be halted immediately, according
to the ICAEW.

Responding to a consultation by the Accounting Standards Board on its future
role, the institute called for a ‘significant pause’ in its international
financial reporting standards convergence programme to help unlisted companies
avoid burdensome costs and significant uncertainties.

Instead, the board should wait for the outcome of the international project
on accounting standards for SMEs before progressing.

The institute added that the International Accounting Standards Board should
produce significantly less complex standards for companies without external
investors, using historical cost instead of fair value as their basis.

‘If the ASB was to proceed with the current IFRS convergence programme,
private companies could face the grim prospect of switching from UK GAAP to full
IFRS to simplified IFRS in short succession,’ said ICAEW chief executive Eric
Anstee.

‘This would be an unacceptable outcome, involving substantial costs and
uncertainties, without delivering any corresponding benefit to the users of the
accounts.’