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The Future Of Financial Reporting in Ireland
The Future Of Financial Reporting in Ireland
Recently the Accounting Standards Board published its proposals for the future of financial reporting in the UK and Republic of Ireland.
Limerick,
Munster,
Ireland
(prbd.net)
30/09/2011
Recently the Accounting Standards Board published its proposals for the future of financial reporting in the UK and Republic of Ireland.
Margaret Ryan, from BDO Limerick Accountants has examined these proposed changes how they will affect businesses and companies in Ireland.
If adopted, the new Financial Reporting Standard for Medium Entities will require all but the smallest entities to prepare financial statements under a version of IFRS.
The FRSME will have significant advantages to those entities applying it including:
• Reduced disclosure requirements than those required under full IFRS; and
• Simpler accounting as there will be fewer accounting options available for companies an example of which is in the area of valuations of property (land & buildings). Revaluation will not be allowed under the new FRSME expect in the case of fair value accounting for business combinations.
There are also disadvantages with the simplified accounting treatment for example:
• Entities who previously met the criteria of capitalising research and development costs may how have the immediately expense these costs. The full IFRS requires that development costs must be capitalised once the expenditure passes certain criteria; and
• Although ‘qualifying subsidiaries’ may opt for reduced disclosure, this may not be practical for groups using common accounting software across the group.
The exposure drafts are currently undergoing the consultation process which was initially to run until 30 April 2011. It is now envisaged that this process will be finalised late this year with the final standard ‘FRSME’ being issued early in 2012. It is also envisaged that the standard will become mandatory for all entities, apart from those applying the FRSSE, for accounting periods beginning on or after 1 January 2014.
For more information on these proposals please visit the BDO Limerick website: www.bdolimerick.ie