By Daniel Hunter

The most significant change to UK financial reporting in recent years is about to hit but a recent survey by Smith & Williamson, the accountancy and investment management group, reveals many businesses are not prepared.

The survey of finance directors and chief financial officers reports that over 90% of businesses are still not ready for FRS 102, with close to 50% not even beginning to consider it.

Chris Appleton, chairman of Nexia Smith & Williamson said: “FRS 102 is the single accounting standard that will replace UK GAAP for accounting periods beginning on or after 1 January 2015. Given the potential magnitude of the impact which FRS 102 will have on the preparation of accounts, it is surprising that so many companies appear to be ill prepared at this stage.

“Close to a third of the people we questioned in the survey were not aware of whether there would be any significant accounting impacts arising for their businesses from FRS 102.

“Our survey also indicates that businesses are still struggling to implement the changes. Less than 10% of the individuals canvassed believe that they had the necessary skills in-house to do so.

“Although the new accounting framework has been expected for close to two years, arrival seems to have put organisations on the back foot. Close to 90% have not managed to fully explain the potential impact on the business to their external stakeholders and 62% have not even begun attempting to do so.”

“We are working with an increasing number of companies to assess the impact of the new reporting standard and assist with implementing the changes. We are liaising with our client’s finance teams, reviewing the effects of FRS 102 and setting out clearly the potential outcomes.

“We are taking a pragmatic and co-operative approach to FRS 102 with our clients. Using our technical expertise and practical experience we are working closely with our clients to keep them abreast of these new reporting developments and to assist them in avoiding the pitfalls of failing to comply with the new regulations.”

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