IRISH FIRMS DISCARD UK CODE
Irish companies are set to discard the UK accounting rules they have been moored to for decades and adopt an international accounting code – the IFRS – for small and medium sized businesses.
Reported profits will be different under the new rules. Assets and liabilities will be measured differently and some new assets and liabilities will appear on an IFRS for SME balance sheet that were not there under UK rules. For example: property may be revalued to market value under UK rules but must stay at cost under IFRS for SMEs; and some financial instruments such as derivatives were ‘off balance sheet’ under UK rules but will be included at fair value under IFRS for SMEs. The former example will tend to show lower building valuations and lower depreciation and higher profits under IFRS for SMEs, and the latter example will accelerate profits in the short term and reduce long-term profits under IFRS for SMEs.