Strategic Finance
Aim companies subject to new standards Print E-mail
Written by DOF Online, 2007   
Wednesday, 04 July 2007
Companies quoted on Aim, the London Stock Exchange’s Alternative Investment Market, are having to produce accounts compliant with International Financial Reporting Standards for the first time in 2007. The new IFRS standards apply to all accounting periods starting after 1 January 2007, but that will mean not only the full-year accounts producing during the following year but interim reports too.

For companies with calendar accounting years, that will mean reports for the six months to 30 June must be produced in accordance with the international standard, therefore. Some companies that thought they had until 2008 to become familiar with new rules are thus already having to deal with them.

UK companies with full listings have had to produce IFRS accounts since 2005 but Aim Notice 22, published in August 2006, extended the requirement to all Aim companies incorporated in the European Economic Area. Aim Rule 19 requires companies to produce half-year reports that meet European Union requirements.

The UK accounting watchdog, the Financial Reporting Council, concedes that even fully-listed companies found the initial move to international standards challenging and has produced guidance for Aim companies facing IFRS for the first time. It suggests finance directors and boards consider the change early.

The Financial Reporting Review Panel found several areas of non-compliance when companies moved to IFRS, in particular presentation of the income statement, the allocation of items between the Sorie (statement of recognised income and expense) and the statement of changes in equity, and also the appropriateness of accounting policies.

It is suggested that auditors are involved even for unaudited half-yearly accounts because this will identify problems that could arise at the full year and might require reconciliation of the interim and annual accounts.

For more information please visit  www.frc.org.uk/frrp/publications
 

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