ASB Unveils FRSME
The ASB (The Accounting Standards Board) has published proposals about the future of financial reporting in the UK and Republic of Ireland.
The ASB’S long-awaited proposals include a simplified UK standard based on the International Financial Reporting Standards (IFRS) for small and medium based businesses and a 3-tier reporting framework.
If the proposals of ASB are accepted, it will mean that the UK GAPP will end.
As has been adopted by the European Union, the quoted groups will continue reporting under the IFRS. These groups will be joined by the other companies in Tier 1, which are publicly accountable. Only very small financial institutions will be exempted from the guidelines.
FRSSE (Financial Reporting Standard for Smaller Entities) is what will be continued to be used by the smallest companies. It is the simplified version of UK standards.
Companies which are in-between the large firms and the very small firms would be reporting using a new standard that is based on the IFRS for SME’s. This is considerably less complicated and shorter than the current UK standards. It will be called the FRSME.
FRSME will ease tax reporting and comply with UK and EU law. It consists of about 400 pages.
The ASB has published its new proposals because it is of the opinion that the present 2000-page book “is an unwieldy and incoherent mixture of old UK standards and ones that have been partly converged with IFRS”.
The present ASB standards have been built after a decade of work.
ASB estimates have put the costs of this transition of proposals at £78.9 million.
The ASB board has said in a statement that “much of the costs will be recouped through simplified reporting. There is also potential for a reduced cost of debt.”
The consultation period will continue till April 30, 2011.