The commercial effects of the transition
Companies submitting their accounts to IASs must recognise that these are not just changes that can be dealt with when drafting the annual accounts. For example:
- Non-UK subsidiaries may also have to adopt new accounting practices and give extended disclosures to their parents for segmental reporting purposes
- Accounting systems will have to capture derivatives
- Gearing ratios particularly, and profitability and earnings figures possibly, may be affected to the point of testing bank covenants and surprising analysts. (Don't let the results be a shock!)
Well prepared companies may well issue proforma IAS information in the run up to the formal implementation.
The convergance of the two boards.
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