PracticeAuditDraft IFRS for SMEs expected tomorrow

Draft IFRS for SMEs expected tomorrow

New code to be released amid concern over business costs

A new accounting code for the UK’s SMEs is expected be released for
consultation tomorrow.

The Accounting Standards Board (ASB) is on the verge of releasing new
accounting rules for about an estimated 80,000 UK businesses, which will
eventually lead to the scrapping of current accounting rules, UK GAAP.

The accounting rules will draw on international financial reporting standards
(IFRS), released by the International Accounting Standards Board last year.

The Department of Business (BIS) is is concerned the new rules will present
an unnecessary burden to businesses recovering from the recession and absorbing
the impact of the comprehensive spending review.

In a September 21 letter, BIS corporate law and governance director Richard
Carter wrote to ASB chairman Ian Mackintosh warning new accounting rules “could
well involve a significant increase in net cost to UK businesses”.

There’s also concern the new code will make accounting more complicated for
some businesses. Under the new classification systems all listed companies have
to use full international accounting rules. Companies listed on the PLUS
markets, which do not use full international accounting rules, may be forced to
contend with complex rules.

“I have doubts whether full IFRS is suitable in view of its increasing
complexity and theoretical nature,” ASB board member Andy Simmonds said earlier
this month.

Further reading:

Big
business main beneficiaries from IFRS: BIS

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