Gofynion Cyfrifeg ac Archwilio Ariannol

Changes to Accounting and Auditing Requirements

SI 2004 No. 2947- The Companies Act 1985 (International Accounting Standards and Other Accounting Amendments) Regulations.

Recent changes to the accounting and auditing requirements in the Companies Act 1985 will affect all companies in some way, from financial years beginning on or after 1 January 2005. This is a brief summary of those changes. Guidance Notes explaining the changes in more detail are available at http://www.dti.gov.uk/files/file21617.doc.

All companies except charities will have the option of preparing their individual accounts using International Accounting Standards (IAS) rather than UK GAAP, and non-publicly tradedcompanies except charities will also have the option of preparing their consolidated accounts using IAS.

All companies that continue to prepare their accounts using UK GAAP will have a new accounting option to use fair value accounting for financial instruments, investment property and/or living plants and animals.

For all companies that continue to prepare their accounts using UK GAAP there are changes to the requirements in these areas:

how and where proposed dividends are disclosed in the accounts;

how items must be presented in the balance sheet and profit and loss account;

disclosure of information on derivatives.

For companies that have overseas interests , the current automatic three-month extension under section 244 of the Companies Act 1985 for laying and delivering accounts is repealed.

For parent companies, there are changes to the requirements and options on consolidation.

For all companies except small companies , there is a new requirement to disclose information about financial instruments in the directors’ report.

For companies that have their accounts audited, there are new requirements concerning the audit report.

For companies that issue summary financial statements, these can now be revised voluntarily in the same way as annual accounts and directors’ reports.

In addition to changes in the Companies Act 1985, parallel changes are being made to UK Financial Reporting Standards, which will affect all companies that continue to use domestic standards. These changes are outlined in the Guidance Notes referred to above.

If you have any queries please click on the following link

http://www.dti.gov.uk/bbf/financial-reporting/standards/page21457.html