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HMRC have produced two documents to assist companies set to see changes to their preparation of financial statements over the coming years.
The papers provide an overview of the tax considerations that arise in a shift from the UK’s current generally accepted accounting principles (GAAP) to new, EU-endorsed standards.
HMRC have produced two documents to assist companies set to see changes to their preparation of financial statements over the coming years.
The papers provide an overview of the tax considerations that arise in a shift from the UK’s current generally accepted accounting principles (GAAP) to new, EU-endorsed standards.
Many large businesses will soon be required to adhere to one of two new international financial reporting standards (IFRS) – either FRS 101 or FRS 102 – and the taxman’s information is geared towards companies that apply one of the standards or are planning to do so.
The Revenue documents, which the department has pledged to update as further information comes available, concentrate on the corporation tax position but are expected to help individuals and other entities within the charge to income tax, given many of their accounting and tax issues will be similar to those of companies.
The differences between the two tax regimes – including specific rules for loan relationships, derivative contracts and intangible fixed assets that apply only for the purposes of corporation tax – are not reflected in the taxman’s information, the main section of which is split in two.
Part A provides a comparison to the position under current UK GAAP, while part B provides a summary of the accounting and tax considerations that arise on transition to one of the new reporting standards.
