IASB streamlines accounting rule book for SMEs
The International Accounting Standards Board (IASB) has produced a thinner version of its rule book in an attempt to woo small businesses. Dan Martin reports.
After extensive debate over whether the same financial reporting rules should be applied to both listed and unlisted entities, the Board published on Thursday a draft 320-page draft version of its new International Financial Reporting Standard (IFRS) for SMEs.
Continued...
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"reducing the burden on the preparing company"
I doubt if a 320-page guide to preparing accounts falls into the category of "reducing the burden on the preparing company".
I fail to see how I need to read 320 pages of international irrelevance when preparing a subcontractors accounts - unless a UK Government, perhaps encouraged by the CCAB or "big four" Accounting practices decides to surrender sovereignty again in this respect and makes the irrelevant international rules mandatory. Introduction of a 320 page rule book on small business accounts would go against the concept of reducing administrative burdens on business.
If we MUST have international interfering rules on small business accounts, then I suggest that SME's with a turnover of (say) £5million pa or less "carry on as normal" and ignore this proposed irrelevant international garbage by sensible legislative exemption.
If sensible exemption is not forthcoming a campaign of mass civil disobedience may be warranted - all sensible accountants and their clients could carry on as normal ignoring outside influence and preparing accounts as we have done for the past 20, 30 years or so.
Not fit for purpose
I applaud AccountingWEB for raising this issue.
The above comment already makes a link to some of my concerns on the FRSSE - which I think an exceptionally poorly conceived document. The IASB approach to SME accounting is worse. It was headed by a partner in Deloittes who thinks small entities have 50 employees, it's based on the FRSSE, it incorporates the same 'let's cut down big business accounting and assume it meets the needs of SMEs' approach - which is fundamentally flawed, and from the outset it acknowledges that this is a standard which will not be a suitable basis for assessing taxation - which ignores one of the primary uses of SME accounts and can only add to the admin burden of SMEs all over the world. This prposed standard is not fit for purpose.
There is an alternative which the UN promotes. It's simple, very short, and looks like a set of accounts. It can be explained, avoids all the accounting nonsense we've (I stress we've) loaded on SMEs and could be used by almost anyone. It's time to back SMEGA 3 - as the alternative is called. Read about it here http://www.taxresearch.org.uk/Blog/2006/10/13/an-accountant-at-the-un/