The future of UK GAAP: ACCA costs the change

ACCA (the Association of Chartered Certified Accountants) today publishes the first detailed comparison to date of the differences between UK Generally Accepted Accounting Standards (UK GAAP) and the International Financial Reporting Standard for Small and Medium-sized Enterprises (IFRS for SMEs).

ACCA’s new report, entitled The new UK GAAP: how would the numbers look? explores the potential impact on reported profits of companies who currently use UK GAAP and will be affected by proposals issued by the UK Accounting Standards Board (ASB) in 2009. The report can be found at this link: http://www.accaglobal.com/pubs/general/activities/library/financial_reporting/other/tech-afb-nug.pdf

These proposals will result in UK GAAP evolving to reflect the IFRS for SMEs as published by the International Accounting Standards Board (IASB). ACCA’s report focuses on those differences between the two standards which could make reported profits larger or smaller, and the extent to which this would alter the tax payable.

“The intention is that the IFRS for SMEs should replace the current UK accounting standards perhaps from 2012,’” says Richard Martin, ACCA head of financial reporting and the report’s author.

“This report identifies over 50 potential differences between current UK accounting and the international standard. In each case, we have tried to identify whether this might mean that profits would be larger or smaller and if this means paying more or less tax on them.

“Any individual company will not be affected by all of the differences, but we recommend that accountants check to see whether they or their clients might be impacted.”