The Proposed Removal of UK GAAP
18/09/2009
Since 2005 listed groups within the UK have been required to prepare consolidated accounts using International Financial Reporting Standards, or IFRS. However most other companies have had the choice of whether do adopt IFRS or not., or indeed should the company be classed as small, the FRSSE (Financial Reporting for Smaller Entities) could be adopted.
However, from 2012, these options may be changing.
UK GAAP (Generally Accepted Accounting Principals) will be replaced by IFRS for Small and Medium sized entities, which is a much slimmed down version of the full IFRS, which runs to approximately 3000 pages.
Small Companies may still be able to use the FRSSE, however medium sized companies will have to use either full IFRS, or IFRS for SME's.
There are some important changes between the two regimes, including the period allowed to amortise goodwill, removal of the option to revalue plant and equipment, and a cashflow statement must be prepared for every set of accounts, including subsidiaries.
The date that the IFRS for SME's can be adopted is uncertain at the moment. The Accounting Standards Board remains in discussion and consultation. Having said that, current opinion suggests that it could be effective for accounting periods ending 31 December 2012, which effectively means comparative figures would need to be collected from 1 January 2010, and it is therefore debatable whether or not this timescale is practical.
If you require any further information please do not hesitate to contact one of our specialist team on 0161 493 1930