Firms urged to act now over change to reporting

Grant Thornton advised that, although under the current proposals the changes will not come into effect until 2012 at the earliest, companies need to be thinking ahead now, considering resource planning and assessing the impact of the new accounting framework.

Proposals made by the UK Accounting Standards Board (ASB) would mean that UK Generally Accepted Accounting Principles (GAAP) would cease to exist and be replaced by new International Financial Reporting Standards (IFRS) for SMEs for most privately-owned companies in the UK, with some private companies having to apply full IFRS.

"There is no doubt that the transition will require time and has the potential to cause disruption to a firm's finance function," said Richard Hobson, a director at the Leeds office of Grant Thornton.

"Preparing financial statements in accordance with these new requirements will see a significant number of UK firms coming to terms with a very different look and feel for their financial statements.

"There are also a number of areas where presentation requirements and measurement principles under the new standard are very different to UK GAAP." Grant Thornton is advising companies to start planning now.