IFRS/UK GAAP convergence

ASB publishes proposals for convergence of UK GAAP with IFRS
On 11 August 2009, the Accounting Standards Board (ASB) published its proposals for the convergence of UK GAAP with IFRS. While these proposals have been under discussion since 2004, the ASB has timed publication to coincide with the publication by the International Accounting Standards Board of its International Financial Reporting Standards (IFRS) for Small and Medium-sized Entities (SMEs). The IFRS for SMEs was published on 9 July 2009. 

The ASB propose a tiered approach to the application of IFRS as follows:

• Tier 1 – publicly accountable entities would apply IFRS as adopted by the EU (‘EU-adopted’ IFRS). 
• Tier 2 – all other UK entities other than those who can apply the Financial Reporting Standard for Smaller Entities (FRSSE) could apply the IFRS for SMEs. 
• Tier 3 – small entities could choose to continue to apply the FRSSE. 

The proposals include details of other considerations such as not for profit entities including pension schemes and charities where Statements of Recommended Practice (SORP) provide additional guidance under the existing reporting framework. For pension schemes, the proposal is to continue with the existing SORP as it is currently the only source of guidance available to pension schemes. For charities, the proposal is to develop a public benefit entity standard. 

The ASB currently propose that the transition date to the new reporting framework would be for accounting periods beginning on or after 1 January 2012. Comments on the ASB's proposals should be sent to the ASB by 1 February 2010.

For further information or advice on transition speak to Malcolm McGready

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