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Proposed IFRS Adoption

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Summary of ASB Proposals

Tier

Accounting Regime

Nature of Entity

1

EU-adopted IFRS*

Publicly accountable

2

FRSME*

Entities without public accountability

3

FRSSE

Smaller entities without public accountability

*A reduced disclosure regime is proposed for qualifying subsidiaries.
The proposals would apply to all entities required to prepare financial statements that give a true and fair view.

International Financial Reporting Standards (IFRS) would primarilly apply to quoted groups and some additional enties which would be classified as publicly accountable. The smallest financial services businesses would be permitted to apply the proposed FRSME.

The Financial Reporting Standard for Smaller Entities (FRSSE) would, as now, be used by small companies.

The Financial Reporting Standard for Medium-sized Entities (FRSME), the new proposed standard based on the international standard for small and medium-sized entities (IFRS for SMEs), would apply to those companies falling into the middle tier.

Qualifying subsidiary is one that is not publicly accountable, is included in the consolidated accounts of a parent whose financial statements are publicly available, and is not subject to any objection from shareholders.

The new framework would be effective for accounting periods beginning on or after 1 July 2013, with earlier adoption permitted.

Public Benefit Entities (PBEs)

The ASB has published a proposed Financial Reporting Standard for Public Benefit Entities (FRSPBE) to accompany the proposed FRSME.
The FRSBE has been developed because IFRS based standards are written for the ‘for-profit’ sector and do not address some transactions that are specific to the public benefit entity sector. Comments are due by 31 July 2011.

Statements of Recommended Practice (SORPs)

SORPs will be retained where there is a clear and demonstrable need.

Background

The proposals for the future of financial repoting in the UK and the Republic of Ireland follow on from the ASB’s policy proposal ‘The Future of UK GAAP’ published in August 2009.

More in this category: « FRSME FAQ FRSME »