IFRS for Non-publicly Accountable
Entities (NPAEs) could be used as a base for developing accounting
standards for all companies, according to PricewaterhouseCoopers UK
senior technical partner Peter Holgate.

IFRS for NPAEs is a simplified set of full
IFRS due to be released by the International Accounting Standards
Board (IASB) in the next few months. The new standards provide an
opportunity to move towards more simplified standards in general,
Holgate said.

The simplified standards could perhaps be used
as a base, then stakeholders should justify why extra requirements
are needed, he explained.

“Even those of us that do technical work
struggle to keep up with all the developments [in accounting
standards] and it must be harder for people who have got companies
to run, so anything that can simplify things is a good thing,”
Holgate explained. “Given that the IASB has done a lot of work in
recent times in developing something that is simplified, and yet
quite a good standard of accounting, we should latch onto that as
much as we possibly can.”

Holgate said the way his theory could be
applied is that each time a standard is developed or revised,
standard setters could begin with the simplified version and then
test what further complexity is required.

He warned there is a danger the trend could
move the other way.

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“When [standard setters] are setting full
standards they might say ‘now we have got this standard for private
entities, the rigours of full IFRS only apply for listed companies
and they are very sophisticated, so we can pile on the requirements
heavily’,” Holgate said. “I am keen to build in something that
works against that.”

The level of simplification would vary by
sector. For example now would not be a good time to ease reporting
requirements on banks, but in most non-financial sectors a lot of
detailed disclosures are there to cater for occasional occurrences,
Holgate explained.

“I think you could [get rid of a lot detailed
disclosures] for most sectors without any serious loss of
understanding,” he said.