1 February was the closing date for responding to the ASB’s consultation on the future of UK GAAP. As of close of play on the 1 February there was already 55 responses to the ASB’s consultation posted on their website. Not unexpectedly there are some strong views expressed, along with some interesting alternative proposals for the ASB to consider. Grant Thornton has also expressed its collective views and you can read these here.
In general it seems that those who accept the need for a change to UK GAAP broadly agree with the ASB’s proposals. Of course, others are firmly in the ‘if it ain’t broke don’t try to fix it’ camp. These views are to be expected. However, there are also some, in my view, more surprising views. For example:
• some have argued for the abolition of the FRSSE meaning all small companies would have to move to the IFRS for SMEs as well those medium and large companies currently using UK GAAP
• some have argued that the ASB should not produce a public-benefit standard effectively meaning that not-for-profit entities would just use the IFRS for SMEs
So there really does appear to be a lot for the ASB to mull over before they reach their final decisions, which will hopefully be made public this summer. My gut feel is that IFRS for SMEs is here to stay but that it will not be mandatory before 1 January 2013. But that still means that companies will have to know what impact IFRS for SMEs will have on their business by 31 December 2011, as one year’s comparative information will be required.
At this point in time I think businesses should start by including in their budgets the cost of the conversion to IFRS for SMEs. At least this way these one-off costs will not come as a nasty shock to the Board. What do you think businesses should be doing now?
We’ve done all we can to make our views heard - now we have to wait (im)patiently for the results…