All About UK Accountancy
UK accountants must also consider the International Financial Reporting Standards (IFRS) as set forth by the European Union (EU). These International Financial Reporting Standards, the IFRS, were developed in an attempt to streamline the financial reports from UK companies as well as companies in other European nations. This makes financial reporting easier to understand by everyone. The IFRS also allow UK businesses to more easily compare their financial statements to those of companies in other nations for the purpose of determining competition and industry standards.
In addition to the GAAP and the IFRS, UK businesses must also adhere to UK law, such as the Companies Act 1985, as amended by the Companies Act 1989. These UK laws incorporate both the GAAP and the IFRS, as well as other European law. The UK Companies Act 1985 also requires UK companies to file their accounts with the Registrar of Companies, which makes the financial reports available to the UK and worldwide public.
The Companies Act 1985 will soon be superseded by the Companies Act 2006, which came into effect on 6 April 2007 in the UK. This UK Companies Act 2006 will restate in varying fashions the provisions laid down in the Companies Act 1985 and the amendments of the Companies Act 1989. However, changes have been made to incorporate the European Union's takeover of financial standards and the laws regarding international trade and financial reporting that are now necessary for UK companies to follow. It also puts into codified law the UK common law that was previously used with regard to UK companies and accountancy.
Any UK accountancy issues that require immediate attention but are not covered by the (GAAP), (IFRS) or Companies Act 1989 are brought before the Urgent Issues Task Force of the Financial Reporting Council. This group determines solutions to issues of UK accountancy and publish abstracts which are binding immediately for UK companies. These additional standards must also be followed by UK companies.
As you can see, accountancy in the UK is much more complex than that of the United States of America. There are many more UK laws, European Laws and accounting standards to follow for UK companies. While Americans must only adhere to the (GAAP) set down by the (FASB), UK companies must adhere also to the International Financial Reporting Standards (IFRS) set down by the European Union. If you have any question about standard accounting practices for UK companies, you should contact an accountant to help you with your UK accountancy issues as soon as possible.
© 2007 Christopher Rose and Buying One
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