Help on accounts needed

cornflower

Hi,

Just a quick question....if a company wants to report under national standards how easy is it to do? my company is owned by a large european based parent and they want us to report under national standards.

Thanks
Carrie

peugeot

Do you mean international standards?

The transition from UK GAAP to IFRS should be relatively straightforward but it can get a bit messy if you don't know fully how to deal with it. You need your auditors involved in this.

Essentially what you have to do is to prepare an opening balance sheet at the START of the earliest period for which you prepare comparatives. So taking a practical example:

Year end = 31 December 2008.

Our comparatives will obviously be the 31 December 2007 accounts. However it doesn't end there! We need to go back to the EARLIEST point in which comparative information is provided (this is known as the 'transition date'). In other words, 1 January 2007. The opening trial balance as at 1 January 2007 (in other words the 2006 accounts!!) will have to be restated to IFRS.

Once you have done this you then need to look at your accounting policies and see if any that were previously acceptable under UK GAAP are permitted under IFRS. One example is where you value stock under LIFO. UK GAAP permits this valuation method, whereas IFRS prohibits it. You also need to look at the assets and liabilities to see if you have recognised any which were permitted under UK GAAP but not under IFRS.

You also need to be aware of the presentational and terminology changes from UK GAAP to IFRS.

You don't have to be an IFRS expert to do this, but you will have to have knowledge of the differences between UK GAAP and IFRS. I wrote an article which outlines the key differences between UK GAAP and IFRS. I will also be publishing another article in the next week or so about the rest of the UK switching to IFRS (the standard is due out in Spring my sources tell me!!).

Hope that helps.

Regards
Steve

cornflower

Thanks for the reply and the link. Not sure how easy this is going to be in real life but we will see

mark130273

hey cornflower. have to tell me how easy it was.as im sure that we will have to change ours soon too .....

peugeot

Hi Carrie,

FYI I have put up an article this week on how to apply IFRS to small companies which I hope will help with your transition.

Kind regards
Steve

cornflower

Thanks steve I have printed that off!:thumbup1: