Your view is needed as changes being proposed may increase costs and create confusion for your business and also your providers of finance.
Two consultations have recently been launched on further proposed changes to UK GAAP. The consultations are:
The consultations set out proposals that would apply for financial years beginning on or after 1 January 2016. Proposals that, when taken with the UK GAAP changes for periods beginning on or after 1 January 2015, further complicate the choice available to many businesses now. The outcome from these consultations could prove expensive for many businesses.
The first consultation, which is open until 24 October 2014, proposes a return to the different thresholds for audit and accounting purposes, after having previously aligned the thresholds. It proposes no change to the current audit limits while proposing increased limits for accounting purposes.
The proposed increases in accounting limits, subject to the normal 2 out of 3 rule, are:
Turnover £ | Balance Sheet £ | Employees number | |
---|---|---|---|
Micro-entity | 632,000 | 316,000 | 10 |
Small | 10,200,000 | 5,100,000 | 50 |
Medium | 36,000,000 | 18,000,000 | 250 |
Some of the other highlights are:
The second consultation, which is open until 30 November 2014, sees the withdrawal of the FRSSE for accounting periods beginning on or after 1 January 2016. It is proposed that a new accounting standard for micro-entities - companies typically turning over less than £632,000 a year - is issued.
It is also proposed that a new section be introduced into FRS 102 for those turning over less than £10.2million. It is stated that “the underlying accounting by small entities will in future be consistent with the standard for financial reporting used by other unlisted companies, subsidiaries of listed companies and public benefit entities such as charities; however the presentation and disclosure requirements for small entities may be more straightforward.”
You can help ACCA respond on your behalf to these proposed changes. We will shortly be publishing a series of questions covering the areas in which we need your help.