We respond to the consultation issued by BIS on UK implementation of the EU Accounting Directive

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27 Oct, 2014

We have published our response to the consultation issued by the Department for Business, Innovation and Skills (BIS) on the UK implementation of the EU Accounting Directive.

Overall we support the proposals, although we have some concerns around certain aspects of the consultation. Our key comments are as follows:

  • we believe that, since compliance with UK accounting standards is generally accepted as being necessary in order to give a true and fair view, the role of UK accounting standards will be significant under the new regime in guiding directors of small companies as to whether further disclosures may be necessary, in addition to those mandated by law, in order to present true and fair accounts;
  • we question the value of the proposal to permit small companies to prepare an abbreviated balance sheet and profit and loss account for shareholders as such accounts will still need to give a true and fair view;
  • we strongly support the provision of increased flexibility in the layout of primary statements, particularly to accommodate the application of IFRS layouts and terminology for companies adopting FRS 101;
  • we believe that there should be one single definition of a public interest entity which should be applied consistently wherever it is used in UK company law;
  • we believe that the audit exemption threshold should be consulted on as part of the implementation of the Audit Directive rather than as a separate consultation, making good on the deregulatory promises made in the Government’s 2011 Plan for Growth;
  • we believe that it is essential that the requirements for LLPs are aligned with the requirements for companies with effect from the same date; and
  • we recommend that the Government and the Financial Reporting Council work closely together to make the new regime available to companies as soon as possible, including permitting early adoption.

Further comments and full response to all questions raised in the invitation to comment are contained within the full comment letter which can be downloaded below.

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