By Rob Starr, Content Manager, Big4.com
Iain Selfridge, partner, PwC has commented on the fact that the Financial Reporting Council (FRC) has recently published the first part of a new accounting framework that will replace the current UK Generally Accepted Accounting Principles (GAAP), potentially benefiting thousands of companies.
“There may be cost savings for companies that choose to adopt IFRS or new UK GAAP and there may be advantages for those electing to adopt the reduced disclosure framework. The early adoption provisions give a great deal of flexibility in the timing of moving into the new regime by January 2015, but businesses need to look before they leap,” he said.
“Companies will have to assess their group structure and consider the appropriate reporting options for each subsidiary, balancing the needs of financial statements users against the potential cost savings from preparing reduced disclosures.”
FRS 101 introduces a reduced disclosure framework for subsidiaries using or contemplating IFRS. This will be particularly attractive to subsidiaries that are members of a group reporting under IFRS. They may already be preparing IFRS statutory accounts for the separate subsidiary accounts, so the option to reduce disclosures will be a welcome relief. The reduced disclosure framework will also allow UK subsidiaries to ‘trade up’ to IFRS accounting, but still take advantage of the disclosure exemptions of FRS 101.