This comment letter from Deloitte (United Kingdom) is in response to the Accounting Standard Board's (ASB's) invitation to comment on the future of financial reporting in the UK and Republic of Ireland following the publication of FRED 46 'Application of Financial Reporting Requirements' ('draft FRS 100'), FRED 47 'Reduced Disclosure Framework' ('draft FRS 101') and FRED 48 'The Financial Reporting Standard Applicable in the UK and Ireland' ('draft FRS 102').  The comment letter sets out Deloitte responses to the specific questions raised by the ASB and some additional matters that they wished to raise that were not specifically addressed within the ASB questions. 

In summary Deloitte:

• accept that UK GAAP, as it currently stands, should be replaced;
• believe that the FRC Board should seek to influence strongly the forthcoming review of the IFRS for SMEs;
• are concerned that the requirement to apply the Accounting Regulations, in some cases, erodes the benefit of reduced disclosure for those entities applying the proposed reduced disclosure framework for listed groups. Deloitte encourage the FRC Board to work with BIS and to lobby the EU Commission to address this;
• encourage the FRC Board to make available the reduced disclosure framework for listed groups as soon as possible;
• do not want the timetable for implementation of draft FRS 102 to be delayed further as a result of the IASB’s progress in finalising IFRS 9 Financial Instruments;  
• believe that the FRC Board should provide periods of stability to preparers, users and auditors in respect of UK standards and should commit to seek to change these at intervals of a minimum of three years. With the exception of changes to draft FRS 101 that may be necessary if changes are made to IFRSs, we believe no mandatory changes to FRSs 100, 101 and 102 should be made before 2018. This will provide a stable platform to allow all to adapt to the new standards particularly in the area of financial instruments which may be the most challenging area to preparers, users and auditors; and
• recommend that the FRC Board seeks to promote international convergence and that in due course the IFRS for SMEs issued by the IASB may be adopted directly in the UK.

Download the full comment letter below. 

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