The delay has come about because of the European Parliament’s decision to go ahead with a first reading of its text of the proposed new accounting directive, rather than wait to iron out any differences first with the EU Council’s own text.
This means that the directive is unlikely now to be finalised until well into 2013 rather than by the end of this year, as had been originally envisaged.
One of the key objectives of the new directive is the application of simplified accounting rules for small businesses. Under the proposals, the accounts small companies would have to prepare would be reduced to an abridged balance sheet, profit and loss account and a limited number of notes, with no additional disclosures.
The “no additional disclosures” clause means that, once the directive is implemented in the UK, the FRSSE will no longer be consistent with the law and will need replacing.
The UK Accounting Standards Board had hoped to know what the final version of the directive would look like so that it could work on the replacement.
The ASB is currently working on the replacement for UK GAAP for medium and large companies which is due to come into operation by the end of 2012. The consultation phase closed on 30 April.