The initiatives to get all UK public and private organisations reporting under IFRS are accelerating
Since January last year 7,000 EU-listed companies, including those in the UK , have been implementing International Financial Reporting Standards and judging by many reports it has not been easy. It is widely recognised that UK GAAP will sooner or later converge with IFRS, since all the standards that have been issued by the UK 's Accounting Standards Board since 2004 have been drawn up with this principal intention. The debate within the accountancy profession centres on the likely date of full convergence.
It is important that all companies keep on top of the changes and prepare well in advance because initiatives to require all UK public and private organisations to report under IFRS are accelerating. The long-term benefits of all organisations throughout the UK , and the world, using the same standards are quite apparent.
Professor Sir David Tweedie drove the move towards IFRS when he became Chairman of The International Accounting Standards Board. Before taking this post Sir David was the Chairman of the UK 's Accounting Standards Board. The case for IFRS is simple - if all organisations adopt IFRS then we will be able to compare financial results across international borders rather than being limited to individual countries.
Why are some companies hesitating? For some it will be the short-term effects on taxable profits and distributable reserves, for others it will be the scale of the implementation project and the associated costs. There can be more paperwork and more man-hours worked but those in favour of IFRS argue that IFRS adoption has delivered better disclosure and transparency. Generally those companies that have started the process have reacted positively to the new Standards.
The first step to implementing IFRS is to understand fully the requirements of IFRS and to recognise the system changes that will be necessary if your financial reporting is based upon UK GAAP or the generally accepted accounting practice of another country. Peter Hughes is a Chartered Accountant who presents The Essential Guide to International Financial Reporting Standards. He has been tracking the progress of IFRS over the years and in particular has monitored the differences between IFRS and UK GAAP, and also US GAAP and the generally accepted accounting practices of other countries. Peter strongly urges accountants and the directors of limited companies to embrace IFRS and establish implementation programmes. If they don't plan the introduction of IFRS then it is inevitable that time will run out, resulting in a hasty implementation and, no doubt, unnecessary higher costs.
Accountancy Age have produced the following IFRS articles which are available on their website. Simply click the links to read the articles.
IFRS - The story so far
For information on republishing any of the content of Accountancy Age's articles please contact Paul Briggs .
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