The rules governing accounting standards are undergoing the biggest change in 30 years. And, while accountants have been bracing themselves for a potentially seismic change for a while now, many businesses could be forgiven for being unaware that anything was changing at all.
So what is changing?
From 1 January 2015, a new financial reporting framework came into effect which consisted of 4 standard published by the FRC. These new standards, collectively known as the New UK GAAP, are being phased in gradually to replace the old system.
The main aims of the new system are:
- make the reporting requirements of specific companies relative to their size
- reduce the complexity of UK GAAP
- bring the UK in line with International Financial Reporting Standards (IFRS).
What do businesses need to do?
Establish – which of the new reporting standards applies to your business?
Identify impact – once you have identified which standard applies to you, drill down into what the likely impacts on your business are
Review – Take a look at your internal systems and accounting policies
Know the date – Be aware and ready for the transition