E&Y: 66% favour two-tier international standards over UK GAAP

TWO-THIRDS of UK businesses are in favour of a two-tier accounting system based on international financial reporting standards, according to a new report.

Ernst & Young surveyed 290 companies and found the majority back the move, while 27% called for three-year delay on transitioning, and 6% opposed the plan altogether.

Andrew Davies, partner in financial accounting advisory services, said: “This is a clear vote in favour of wider IFRS application in the UK,” adding that the survey represented “a broad selection of UK corporates [and] their willingness to embrace the new system is particularly striking”.

The consultation on IFRS for SMEs launched by the Accounting Standards Board is drawing to a close; in it, the body proposed a simplified version of the international guidelines, known as FRSME.

The current timeline puts companies on course for their first mandatory non-UK GAAP accounts for 30 June 2014 year-ends, with a 1 July 2012 transition balance sheet. Just over one-third of respondents said they are switching to full IFRS, while 24% envision adopting FRSME and the remaining 41% had yet to decide.

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Fiona Westwood of Smith and Williamson.