In December, the end of year audits will be coming to an end, and there has been a lot of activity recently with firms surrounding the GAAP conversion ahead of the UK’s implementation of FRS 101, FRS 102, Reduced Disclosure Framework, and the Financial Reporting Standard according to new UK legislation.
During a recent webcast conducted by Ernest & Young, they asked UK businesses who questions about where they are in the changeover process. Out of over 1,100 participants, the majority stated that they have made a decision about which framework to use (with only 20% of participants saying they were undecided), however, there appeared to be a wide inconsistency in where firms are in the conversion process: roughly 20% said they have yet to start, 13% are nearly finished and the majority by far are somewhere in between those two figures.
Unless they are part of the 13%, there are two key steps UK companies need to do shortly:
Calculate what tax elections need to be made: These need to be made by the 30th of June 2015 (for a calendar year end) in order to be prepared, its best to make arrangements with your tax adviser as soon as possible.
Identify a comprehensive list of GAAP differences and calculate their cost: it’s great to know what your key GAAP differences are because they probably have the most important effect on your business processes, tax and distributable reserves.