SMEs advised of financial reporting changes

News Article - 27 May 2008
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Small businesses are being warned that changes are coming into effect under government legislation.

Accounts software can help small and medium-sized enterprises (SMEs) to meet their financial reporting responsibilities, saving many substantial time and money.

Changes have taken place to UK tax legislation as a result of the Companies Act 2006 and recent reform of the capital gains tax system, according to an article on Accounting Web.

All small and medium-sized enterprises (SMEs) will be affected by tax and financial reports changes and firms can improve their compliance with accounting standards by investing in accounts software.

The latest version of the Financial Reporting Standard for Smaller Entities (FRSSE) applies to accounting periods from January 1st 2007 and features "all the latest accounting standards and requirements under company legislation", though it does not yet include the Companies Act 2006 provisions.

However, convergence to International Accounting Standards (IAS) will dramatically change financial reporting standards in the UK and the IAS board is currently considering comments on the proposed International Financial Reporting Standard for Small-Medium Entities (IFRSSME).

The IAS will not represent a huge change from the current UK accounting standards and it is not yet clear when the new standards will come into force.

From 2005, all listed companies in the European Union have been required to use International Financial Reporting Standards (IFRS) to prepare financial statements. In order to develop a single capital market across the continent, smaller businesses will be subject to IAS in the future.

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