UK Government and FRC publish discussion paper on reducing the financial reporting burdens for micro-entities
Aug 29, 2011
The UK Department for Business, Innovation and Skills (BIS) and the Financial Reporting Council (FRC) have published a discussion paper with proposals to simplify the financial and corporate reporting requirements for the smallest businesses.
Small and medium sized entities (SMEs) feel that laws and regulations, and accounting and auditing standards governing business have become very much more complex in an attempt to address a world where businesses at the top end of the corporate sector have become larger and more diverse, and their activities increasingly complex. Complying with all these requirements is burdensome, costly and of little added little value to SMEs, to their stakeholders, or to other users.
The BIS and FRC's discussion paper seeks views on the development of a new reporting regime that
- fulfils certain minimum requirements,
- aligns financial reporting requirements with tax requirements, and
- reduces or removes inconsistencies in the current requirements.
In a similar vein, the European Commission had proposed in February 2009 to allow Member States to exempt very small entities from the requirements of the 4th Directive. After a long period of negotiations, the European Parliament is currently considering the agreement on proposals reached by the Council of Ministers on 30 May 2011.