EY comment on future of financial reporting proposals

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Yesterday, the comment period closed to give feedback to the UK Accounting Standards Board’s (ASB) proposals for the future of financial reporting in the UK and Ireland.

Andrew Davies, Leader of Financial Accounting Advisory Services in the UK and Ireland at EY said:”We support the ASB’s proposals for a mandatory implementation date of 1 January 2015 for the revised reporting framework proposals. We also agree that early adoption is permitted for periods beginning after the date of publication of the standards.

"Should there be a significant delay in finalising The Financial Reporting Standard Applicable in the UK and Republic of Ireland ("FRS 102"), we believe that the ASB should proceed with issuing the Reduced Disclosure Framework (the option to apply IFRS with reduced disclosures, "FRS 101").  In our experience, many entities are interested in taking advantage of IFRS with reduced disclosures at the earliest opportunity. This brings consistent recognition and measurement principles to IFRS used for group reporting purposes, while reducing the burden of the disclosures required by full IFRS."

“We recognise that the ASB has considered carefully and responded to the comments on the earlier proposals and has made a number of amendments to the framework to reduce potentially onerous reporting.  In general, we support the amendments made by the ASB.  In our response to the ASB we have raised a number of reservations and comments, mainly over the content of draft FRS 101 and draft FRS 102 and we have asked the ASB to consider these comments in finalising its proposals. These comments include items such as formats of the primary financial statements under FRS101, first time adoption considerations, compliance with Company Law and a future review process for the evolution of FRS102.   It is important that the final standards are clear and workable for UK entities, many of whom do not have experience with IFRS, and do not give rise to undue diversity of practice due to difficulties in interpretation.”