The UK Accounting Standards Board
(ASB) has received more than 150 responses to its discussion paper
on the future of UK GAAP.
The consultation was launched six months ago
and focuses on moving UK GAAP towards international standards,
using a three tier approach:
• Tier 1 – publicly accountable
entities would apply IFRS as adopted by the EU;
• Tier 2 – all other UK entities,
other than those who qualify to apply the Financial Reporting
Standard for Smaller Entities (FRSSE), would apply IFRS for
SMEs;
• Tier 3 – small entities could
choose to continue to apply the FRSSE.
The ASB will host public events later this
year to share its initial analysis of the responses and discuss how
the process might move forward. More comments will be welcome at
that stage.
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By GlobalDataThe ASB will then publish an exposure draft on
recommendations for the future of UK GAAP.
ASB chairman Ian Mackintosh said the responses
to the consultation expound different points of view on major
topics and the board will carefully consider all points of view to
establish the best way forward for UK GAAP.
Most respondents agreed IFRS for SMEs should
replace UK GAAP.
Deloitte UK, for example, said that UK GAAP is
broken. UK GAAP is based on IFRS and the Big Four firm said annual
revisions of IFRS, and the use of full IFRS by some UK entities,
makes it difficult to determine what the UK standards actually
are.
One issue that raised different views was the
timeframe for replacing UK GAAP with IFRS for SMEs.
Deloitte strongly supports allowing IFRS for
SMEs to be used on a voluntary basis as soon as possible. Other
stakeholders, including mid-tier firm Kingston Smith and the
Institute of Chartered Accountants of Scotland (ICAS), said the
proposed adoption date set out in the consultation paper, which is
accounting periods beginning on or after 1 January 2012, is too
soon.
ICAS proposed a transition date of at least
two years from the date of publication of the final
requirements.
Deloitte expressed disappointment at the
length of time it has taken the ASB to resolve the questions about
the future of UK GAAP.
“We are disappointed that after four
consultations from the ASB over as many years on the this topic, UK
business is still facing a lengthy period of uncertainty over the
future of UK GAAP,” the firm wrote
