UK unprepared for upcoming fundamental changes to financial reporting standards shows recent survey.
A survey of the Ernst & Young shows that most of the finance executives in the United Kingdom are not ready yet for the major changes in the international standards for financial reporting. This is after the announcements of the UK financial staff that they will be introducing new standards in financial reports, which will surely affect various aspects of different businesses. Its impact is targeted to affect the procurement, corporate transactions as well as covenants and even the schemes for employee’s bonus.
The said survey consulted various finance executives of 600 companies in the UK. It has been found out that they lack readiness for the new rules in accounting standards. The said new rules affect the lease reporting, which means it will now include leased assets to the balance sheets of the company. It will also introduce new rules on the revenue recognition, which will now include revenues from various customer contracts of the companies.
With the said respondents stated above, E&Y found out that almost 7 out of 10 of them support the move away from the generally accepted accounting principles or the GAAP. However, more than half or 54% of the respondents said that they are still not beginning to assess whatever the possible impacts of the new rules to their business while around 61% is still not even thinking about its tax implications to their financial reporting.
Aside from revealing the unpreparedness of most of the financial executives in the country, they said survey also highlighted the different challenges that many companies are experiencing when it comes to complying with the new sets of reporting requirements. Furthermore, 45% of the surveyed respondents expressed to the International Standards Boards that they shall reassess the current standards’ usefulness before introducing new products that will again affect financial reporting of the companies.