NEW UK GAAP- Are you ready? We are!
Are you are medium or large size entity in the UK meeting the definition under Companies Act 2006 – if so then the new UK GAAP is here on your door step that needs to be implemented for your accounting period beginning on or after 1 January 2015.
Are you ready for the new UK GAAP? – It brings accounting changes that may have real commercial implications, including the quantum of tax payable and potential dilution of distributable profits.
Below is a summary of the key impacts of the new UK GAAP that you should consider:
- Introducing a new regime for financial instruments, in particular bringing all derivatives on balance sheet at fair value.
- Introducing new requirements for defined benefit pension plans, including bringing group plan deficits onto the balance sheet of at least one individual entity.
- Requiring investment properties to be carried at fair value with revaluation gains and losses recognised in profit or loss whenever fair value can be measured reliably without undue cost or effort.
- Requiring more intangible assets to be recognised separately from goodwill when
there is a business combination.
- Requiring additional deferred tax to be recognised, for example on business combinations and on revaluations of property, plant and equipment and investment properties.
- Presuming that the useful life of goodwill and intangible assets shall not exceed five years when no reliable estimate can be made.
- Permitting merger accounting only for group reconstructions and certain business combinations involving public benefit entities.
How can Fraser Russell help you?
We can help you consider the real commercial implications including the tax payable under the New UK GAAP.
To help you with the implications, our experienced team will:
- Perform an initial impact assessment, highlighting the differences between EU-IFRS, FRS 102 and current UK GAAP.
- Identify the key accounting differences and their likely impact on profit or loss and balance sheet.
- Provide advice on how to mitigate the impacts of conversion (e.g. regarding potential ‘dividend blocks’ and minimising profit or loss volatility).
- Work with our tax colleagues to assess the impact of conversion on cash tax and to assist with tax planning.
- Recalculate internal management information, KPIs and forecasts
- Perform a performance related pay review and bank covenant review
Should you require further references on the new UK GAAP, you may visit:
Contact us today or telephone on 0121 to find out how we can tailor a package to compliment your business activities at a price that is guaranteed to be competitive. Although based in Birmingham, West Midlands, our UK GAAP services are used by clients throughout the whole of the UK and beyond. Don’t forget to subscribe to our 647 5030Newsletter for all the latest updates and please feel free to interact with us via our Social Media sites and Blog.