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I have a question which I need some clarification on please.
I am getting confused between UK GAAP IAS & IFRS. How these link in and when these can be used.
My deduction is that entities with in the UK can prepare accounts under UK GAAP but have to prepare separate accounts for the international markets (if the entity is listed) and for this they have to translate to IFRS. If the standard doesn’t exist in IFRS then IAS is used. Am I correct in this assumption?
Grateful for any help as this is an area I am getting very confused on.
Companies in the UK can prepare either under UK GAAP or IFRS as endorsed by the EU. Restrictions may apply to use of IFRS but generally companies are able to adopt either.
IAS and IFRS are one suite of standards. IAS (International Accounting Standards) are the predecessor standards. Since around 1999 (or is it 2001), the IASB (International Accounting Standards Board) has issued new accounting standards as IFRS and it is envisioned will ultimately phase out the IASs. So to say that where a standard does not exist under IFRS, tehn use IAS is technically not correct as they are all a part of the same suite of accounting standards.
An example of this is Revenue recognition (IAS 18 and IFRS 15). The former has been replaced by the latter effective for annual periods beginning on or after 1 Jan 2018.
The question then is whether a UK company can prepare accounts under full IFRS. Based on my current understanding, the answer is no based on current company law legislation.
Thank you so much for your reply. You have clarified this for me perfectly.