ICAEW press release — 7 December 2000

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01 Jan 2001

The text of press release from the Institute of Chartered Accountants in England and Wales (ICAEW) dated 7 December 2000 entitled "Global Accounting Standards – Achieving the Goal".

Global Accounting Standards – Achieving the Goal
Study Published by the Institute of Chartered Accountants in England and Wales
London, 7 December 2000

A definitive examination of the issues affecting the drive towards global accounting standards is published today (Thursday) by the Institute of Chartered Accountants in England & Wales (ICAEW). The Handbook is being treated as an exposure draft by the Accounting Standards Board (ASB) and is also endorsed by the International Accounting Standards Committee (IASC).

Prepared for the ICAEW Centre for Business Performance (CBP) by David Cairns, a past Secretary-General of IASC, and Chris Nobes, a current member of the IASC board, The Convergence Handbook makes an authoritative contribution to the harmonisation debate by comparing International Accounting Standards (IAS) and UK financial reporting requirements.

ASB Chairman, Sir David Tweedie, has commissioned the Handbook to reveal the disparity between the two sets of accounting standards so that the financial community in the British Isles can examine these differences and inform the ASB whether they believed domestic requirements should conform to IAS or whether they would prefer that the ASB should attempt to persuade the IASC to alter certain of its standards.

Sir David describes the handbook as an "important piece of research which will help to shape the form in which the consolidated accounts of listed companies are produced in the future, not only in the British Isles but throughout the world."

The European Union is committed to requiring companies to comply with IAS by 2005, but fundamental differences are still outstanding. The vision is the creation of a worldwide common standard, which would allow investors to make more accurate, direct comparisons and judgements.

The most significant implication for UK listed companies is that there are several UK GAAP requirements that are not permitted by IAS. If IAS were to be introduced immediately, UK companies following these options would have to change their reporting. For example, they would not be able to present the current UK form of cash flow statement; adopt indefinite useful lives for goodwill and intangible assets; use a timing differences approach to deferred tax; or classify long leasehold properties as investment properties.

Anthony Carey, Director of the ICAEW Centre for Business Performance, said the Handbook was aimed at smaller listed as well as larger global companies. He said: "It is a wake-up call for UK companies who, along with their European counterparts, must adopt IAS by 2005. All companies need to examine the differences between IAS and UK financial reporting requirements and consider how they will be affected by this major proposal."

The publication will be available to delegates at a Consultative Committee of Accountancy Bodies (CCAB) conference at Church House in Westminster on Thursday 14 December.

Notes to Editors:

1. The Convergence Handbook is published by the ICAEW Centre for Business Performance. David Cairns is a former Secretary-General of the IASC and a Chartered Accountant who specialises in international financial reporting issues, and Professor Christopher Nobes is PricewaterhouseCoopers Professor of Accounting at the University of Reading. The Handbook is available for £25 from Jennifer Hay, at the ICAEW Centre for Business Performance, on 020 7920 8634.

2. The ICAEW Centre for Business Performance sponsors and promotes leading edge research on performance related issues of immediate and long-term importance to the business community. Its goal is to advance thinking and practice related to performance enhancement and value creation and to encourage discussion of new ideas by directors, entrepreneurs and others.

3. The Institute of Chartered Accountants in England & Wales is the largest professional accountancy body in Europe, with over 118,000 members. Three thousand new members qualify each year. The prestigious qualifications offered by the Institute are recognised around the world and allow members to call themselves Chartered Accountants and to use the designatory letters ACA or FCA.

4. The Institute operates under a Royal Charter, working in the public interest. Its primary objectives are to educate and train Chartered Accountants, to maintain high standards for professional conduct among members, to provide services to its members and students, and to advance the theory and practice of accountancy.

Press enquiries:
Sir David Tweedie, Chairman, Accounting Standards Board, on 020 7611 9700
Allan Cook, Technical Director, Accounting Standards Board, on 020 7611 9704
Anthony Carey, Director, ICAEW Centre for Business Performance, on 020 7920 8557
Eleanor Conroy, ICAEW Press Office, on 020 7920 8607 or 07715 496 469
David Cairns, Author, on 01491 412 444
Chris Nobes, Author, on 0118 931 8229

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