For us practitioners the future is here… but what about our clients?
The Secret Accountant believes changes to UK GAAP present a valuable opportunity to re-assess your relationship with many clients.
My practice has been very proactive throughout the whole of 2015 trying to make sure that all of its partners and staff are well versed in the substantial changes made to UK Generally Accepted Accounting Practice (UK GAAP) that came into effect for accounting periods commencing on or after 1 January 2015. At the same time, it has been providing regular updates to both clients and targets on this subject.
While it’s fair to say that these updates have largely been around how and why the debits and credits will change there has been some subtle (and some less so) messaging to the practice on how this opportunity to earn additional fees and increase recurring fees should not be overlooked.
This is the once in a lifetime opportunity that presented itself previously in 2005 and 2007 when the main market and AiM listed companies were mandated to apply EU adopted International Financial Reporting Standards (IFRS) in their consolidated financial statements respectively.
Despite all this information being made available, it continues to be of continuing concern that a good number of companies do not appear to have heard the news that the financial reporting framework is changing and they need to start preparing.
An example of this happened recently when I was discussing with the finance director (FD) of a reasonably sized AiM company what decision, if any, had been made concerning the transition to ‘New UK GAAP’ for the parent company and its UK subsidiary entities. This company had decided to adopt FRS 101, ‘Reduced Disclosure Framework’, in all of the relevant company accounts as there were not a substantial number of IFRS adjustments required to the extant UK GAAP results to prepare the IFRS consolidated accounts.
Simple it seemed, until I enquired whether the parent company had notified shareholders that it intended to take advantage of the disclosure exemptions in FRS 101, a condition precedent in the standard to take advantage of the exemptions. While the answer was no, I was able to reassure the FD that there was still time to notify shareholders thereby avoiding a nasty shock that would have come to light during the year end audit by which time it might just be too late to do much about it.
While the future may have already arrived for you, don’t be so sure about your clients and make sure you don’t miss out on the once in a lifetime opportunity for extra fee generating work around the transition exercise and beyond. Once gone it may not be back for a while…