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Regulator steps back from tough new accountancy rules
Feedback on proposed changes to accountability standards suggested implementing European standards would be too costly.
The Accounting Standards Board has reneged on plans to impose new disclosure standards on building societies and other lenders after feedback to the proposals suggested it would prove too costly.
According to the ASB’s original plan, non-listed companies that are deemed to be ‘publicly accountable’ would have had to implement the European International Reporting Standards in 2013.
An organisation would be recognised as publicly accountable if it acted in a fiduciary capacity, or had a duty of care for individuals’ money. This means it would have most dramatically affected UK building societies and credit unions.
However, the ASB said it changed plans after receiving feedback that the cost to some businesses of applying the EU-adopted International Financial Reporting Standards would outweigh any potential benefits.
As a result, the ASB decided to eliminate the category of public accountability, meaning companies which would previously have been classified as publicly accountable would no longer have to apply the European standards.
The application of the EU standards is not required beyond the rules of the EU’s International Accounting Standards Regulation.
The ASB has also pushed back the date of implementation by two years from 1 July 2013 to the same day in 2015, with an option for companies to take up the new policies earlier if preferred.
