RegulationAccounting StandardsCo-op reps lobby against IASB dividend overhaul

Co-op reps lobby against IASB dividend overhaul

Co-operatives UK says proposals to treat dividends as refunds and deduct them from revenue, will batter accounts

THE NATIONAL trade body for co-ops is lobbying against changes to accounting standards that will see dividend payments deducted from bottom lines.

Co-operatives UK said the proposals, which require co-operatives to treat dividends as refunds and deduct them from their revenue, will have a significant impact on their accounts and reporting.

Ed Mayo, secretary general of Co-operatives UK, said: “This new standard may end up cutting profits as the rules want to treat the dividend as if it were no different to a sales promotion, rather than something that is fundamental to co-operative businesses since the pioneers – sharing the profit.”

The problem was identified earlier this year by Co-operatives UK’s Co-operative Performance Committee (CPC), which monitors the commercial performance of co-ops.

The CPC includes accountants from KPMG as well as retail societies including the Co-operative Group, Midlands, Midcounties and Lincolnshire.

After drawing the issue to the attention of Cooperatives Europe, Co-operatives UK, with the CPC, submitted a response setting out the threat the new standard poses to the accounting treatment of the co-operative dividend.

Co-operatives UK will be participating in a round table meeting organised by standard setters at the IASB on 10 November to discuss the matter further.

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