The consultation also sets out the Government's proposed
approach to implementation of an EU Directive that modernises the
existing accounting Directives.
Under the EU's IAS Regulation, companies and building societies
with securities traded on an EU regulated market will be required
to use IAS in their consolidated accounts for financial years
commencing on or after 1st January 2005.
Last year the DTI announced that it intended to allow such
publicly traded companies to choose to use IAS in their individual
accounts, and all other companies to choose to use IAS in either
their individual or consolidated accounts, or both. HM Treasury
intends to extend this optional approach to building societies.
The new consultation sets out detailed proposals for the
operation of this choice and for the incorporation of IAS into
company and building society legislation.
In particular, the Government is proposing that an election to
use IAS should be irreversible in most circumstances, and that all
companies within a group should make a consistent choice unless
there are good reasons against this. It is also proposed that
charity companies are required to continue to prepare their
accounts in accordance with UK generally accepted accounting
practice.
The Government is also required to implement the provisions of
the Modernisation Directive by 1st January 2005. This is designed
to bring EU accounting requirements into line with modern
accounting practices by eliminating conflicts with IAS.
