In January the Accounting Standards Board (ASB) issued revised exposure drafts 46, 47 and 48 outlining their intention to replace all current FRSs/SSAPs and UITF Abstracts with a new ‘Financial Reporting Standard applicable in the UK and Republic of Ireland’ which is scheduled to take effect for accounting periods commencing on or after 1 January 2015, explains Steve Collings.
During lectures, the reaction from delegates has been mixed. Many practitioners have expressed their reluctance for the new UK GAAP to take effect as they currently view UK GAAP in its present form to be fit for purpose, while other practitioners are welcoming the new UK GAAP, provided resources are available to help them not only apply the new standards, but also to plan for the change. This article will look at some of the issues within the financial statements that practitioners deal with on a daily basis. It will not go into every conceivable difference between mainstream UK GAAP in its current form and the proposals contained in draft FRS 102, but I have picked out some of the more notable changes that practitioners need to have at the forefront of their mind.
The new UK GAAP will affect many practitioners that deal with clients who are not eligible to apply the FRSSE (effective April 2008). I have always subscribed to the belief that while UK GAAP in its current form is more or less parallel with its proposed successor, there are differences that firms will need to be aware of and additional work will need to be undertaken in the first year that the new standard is applied. For now I will focus on how the accounts might look if the exposure draft is issued without further amendment (which may be unlikely but working on the basis that wholesale changes to the recently issued exposure draft are also unlikely).
Steve Collings is the audit and technical partner at Leavitt Walmsley Associates and the author of ‘Interpretation and Application of International Standards on Auditing’. He is also the author of ‘The AccountingWEB.co.uk Guide to IFRS’ and ‘IFRS For Dummies’ and was named ‘Accounting Technician of the Year’ at the 2011 British Accountancy Awards.