Accounting: UK GAAP replacement needs time |
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| Accounting | |
| Written by Paul Williams | |
| Thursday, 28 January 2010 | |
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Grant Thornton says 1 January 2012 is too soon for major accounting standards shakeup.
Business and financial adviser Grant Thornton, welcomes the Accounting Standard Board’s (ASB’s) proposal to replace UK GAAP with the IFRS for SMEs, but says requiring change from 1 January 2012 will not give most businesses sufficient time to prepare. Its current consultation on the future of UK GAAP, closing on 1 February 2010, would achieve that aim by adopting IFRS for SMEs into UK GAAP. The immediate attraction of a set of internationally recognised accounting standards is the improved cross-border comparability and comprehension of financial reports, theoretically leading to increased access to finance. However, the short-term disadvantage will be the cost of systems changes and training. Brian Shearer, National Director of Financial Reporting said: “The impact of a complete change to the accounting framework will extend beyond the preparation of the financial statements. Many businesses remain unconcerned but management will need time to consider how IFRS for SMEs affects such elements of their business as tax bills, bank covenants and bonus arrangements in addition to the one-off cost of conversion.”
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