The Institute of Chartered Accountants in England and Wales has officially called for a suspension of the International Accounting Standards Board's financial reporting standards convergence program, saying the board's proposal would create high costs and significant uncertainties for unlisted companies.
The accountant group's chief executive, Eric Anstee, has said that more changes in the near future to U.K. standards -- designed to bring into effect IFRS requirements -- could backfire. He said that the international group should wait until a clear picture has emerged of the outcome of the international project on accounting by non-public companies.
In its response to an ASB consultation paper published in March 2005, the ICAEW has requested that the international body produce a significantly less complex set of standards for companies without external investors, using historical cost rather than fair value as the primary basis of measurement.
Since September 2002, the IASB has been working with the U.S.-based Financial Accounting Standards Board to eliminate the differences between the IASB's international standards and the generally accepted accounting principles used in the United States.
"If the ASB was to proceed with the current IFRS convergence program, private companies could face the grim prospect of switching from U.K. GAAP to full IFRS to simplified IFRS in short succession," said Anstee in a statement. "This would be an unacceptable outcome, involving substantial costs and uncertainties, without delivering any corresponding benefit to the users of the accounts."
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