Archive for the ‘Financial Reporting’ Category

IFRS for SMEs

Thursday, January 21st, 2010

Currently under review by the ASB is a proposal that will revolutionise the way UK companies prepare their financial statements. If the plans get the go ahead, these are the accounting systems that UK companies will use to prepare their accounts from as early as 2012:

  • IFRS for AIM & Quoted companies
  • IFRS for other ‘publicly accountable entities’ e.g. Investment trusts, building societies
  • IFRSSE for non publicly accountable entities
  • UK FRSSE for small companies

The ‘IFRSSE’ is the International Standards Boards’ version of the Financial Reporting Standard for Small Entities that we have currently in the UK. It is a ‘one stop shop’ standard that covers all areas of financial reporting in one standard. Users will only need to look at the IFRSSE rather than the full standards when compiling their satutory accounts.

The IFRSSE was published last year and is very similar in style to its UK equivalent. The difference in content is that it offers a simplified version of International rather than UK Standards.

However, and it’s a big ‘however’, as you can see from the above list, the difference in impact is huge. While the UK FRSSE is used by companies that qualify as ’small’ under the Companies Act, the UK’s Accounting Standards Board is proposing that this new standard will apply to all of those companies that fall in between the larger IFRS users and the small companies using the UK FRSSE.

This is potentially the biggest change to UK accounting since standards were introduced back in the 1970’s. You still have time to comment as the period doesn’t close until February. Press comments so far do suggest that the proposal faces no real opposition and so it does look likely to get the go ahead.

As always we will be offering courses on the content of the IFRSSE. You can either book a course for your organisation and we also hope to offer some public programmes.

Keep reading your accounting magazines for updates!

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UK GAAP: who still uses it?

Monday, September 14th, 2009

From this fiscal year most of the public sector will be producing IFRS compliant financial statements (the Local Authorities have a further year’s grace and don’t need to produce IFRS accounts until 2010/11). That means that the following groups of organisations now use IFRS:

Companies quoted on UK Stock Exchange

Companies quoted on AIM

Public sector organisations (from 2009/10)

Local Authorities (from 2010/11)

Any other organisation that chooses to do so voluntarily

So who still uses UK GAAP? Well, many subsidiary companies of IFRS filers still prefer to keep their ledgers under UK GAAP and file accounts this way. Then there are all the private companies and public companies not in the above categories.

The UK Accounting Standards Board is also currently considering whether to adopt the International Financial Reporting Standard  for Smaller Entities (IFRSSE). A paper was published in August 2009 and the thinking is that this could come in from 2012 or 2013.

The IFRSSE is much wider than the UK FRSSE as the International version covers organisations that:

(a) do not have public accountability; and

(b) publish general purpose financial statements for external users.

There are no financial size limits on who could use it as there are for the UK FRSSE. The structure of GAAP that UK companies would use IF this came in would be:

IFRS for AIM & Quoted

IFRS for other ‘publicly accountable’ e.g. Investment trusts, building socs

IFRSSE Non publicly accountable companies

UK FRSSE small co’s!!!!!

This would be a little bit confusing perhaps for users and preparers alike but brilliant news for training companies like mine. ‘Every cloud…’ as they say.

Steve

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Codification of US GAAP

Monday, September 14th, 2009

For those of you using US GAAP, the new ‘Codification’ goes live for any financial statements produced post 15 September 2009. What the standards setting authority in the US have done is taken all the thousands of pieces of guidance from the various sources and put them in to a ‘one stop shop’ document called the ‘Codification’. Instead of having to look at the FAS’s (some of which had been partially updated by other FAS’s!), Bulletins, EITF statements and Statements of Position by various bodies, the rules will all be contained in this one new codification document.

In addition, if you go to the site of the FASB (www.fasb.org) you will be able to subscribe to their service to help you find your way around the new document. I haven’t used this service myself yet but it aims to allow users to quickly access all the rules relating to a particular area, say for example ‘impairments’.

The new Codification is split in to about 90 ‘Topic’ areas numbered in blocks from 100 to 900. The first block is for the concepts and currently starts on number 105.

Hopefully this will make life a lot easier when researching US GAAP items.

Steve

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