'Reporting Rules May Catch out Businesses'

Article excerpt

New accounting rules for reporting results may catch out businesses, accountants Deloitte & Touche have warned.

The full impact of new International Accounting Standards, which becomes mandatory in 2005, has not been fully considered by many Midlands businesses, says the firm.

It follows an awareness seminar Deloitte & Touche put on for companies.

Azam Mamujee, a director in Deloitte's Birmingham office, said: 'Whilst directors and senior management seem to be aware that significant changes are imminent, many of the companies that attended our recent seminar were surprised at the number of practical difficulties that need to be managed as we move towards 2005 with comparatives needed for 2004.

'Furthermore, a number of companies were genuinely concerned at the increased volatility in earnings that may result from adopting IAS.'

Mr Mamujee believes that there are two main reasons behind this lack of awareness.

Because the requirement to comply with IAS in 2005 currently only applies to listed companies, many private concerns think they will remain outside of its influence. However, this is unlikely to remain the case and as part of its plans to converge UK and International accounting rules, the Accounting Standards Board has recently issued drafts of nine proposed new standards and two consultation documents.

The Department of Trade and Industry has also issued a consultation paper on the possibility of extending the application of IAS to non-listed companies. …