BAKER TILLY has supported the move towards International Financial Reporting Standards for SMEs and called for a two-tier system of accounting for all UK companies.
IFRS is currently used for the largest listed bodies while the Financial Reporting Standard for Smaller Entities takes care of businesses at the bottom of the scale. The Accounting Standards Board is consulting on IFRS for SMEs (FRSME), and Baker Tilly partner Danielle Stewart said the proposed changes would create a “relevant and transparent financial reporting system suitable for today’s business environment.”
However, the firm has gone one step further, saying FRSSE should be replaced “at the earliest practicable opportunity” with a two-tier system that would see all non-IFRS users employing FRSME, regardless of size.
The firm said this “would aid comparability between entities in the UK and globally and would be advantageous in the future”. It claimed the costs of such a transferral “would not be substantial” for the majority and warned that retaining FRSSE “could later become a transitional barrier for growing businesses”.
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