The Accounting Standards Board (ASB) has released its long-anticipated proposal for the future of reporting requirements in the UK and Ireland.
The paper was deferred until the International Accounting Standards Board’s (IASB) IFRS for SMEs was published so it could be considered as part of the proposals.
The ASB has proposed a differential reporting regime based on public accountability.
The proposal takes 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 can apply the Financial Reporting Standard for Smaller Entities (FRSSE) could apply the IFRS for SMEs.
• Tier 3 – small entities could choose to continue to apply the FRSSE.
Entities within Tier 2 and Tier 3 would have the option of using EU-adopted IFRS if they wished; those in Tier 3 would have the option of using IFRS for SMEs.
The consultation paper asks whether constituents would prefer to retain the current legal definition of public accountability, which implies that all large entities are publicly accountable.
It also investigates the impact of the proposals on not-for-profit entities.
Deadline for comment is 1 February 2010.