EFRAG Survey on Accounting Standards Changes
With all of the sweeping changes taking place in Europe with the new standards that have been proposed and drafted by the International Accounting Standards Board there are a number of issues that have caused a slight bit of concern. Coordinating the standards between currency conversions and the various accounting regulations is difficult enough, but when some of the countries have been handling accounting for assets, leases, and the recognition of certain financial information one way, it’s difficult to embrace a radical change in these rules.
This week, the EFRAG, or European Financial Reporting Advisory Group met with the accounting standards boards of France, Italy, Germany and the United Kingdom to plan a field test of some of these new proposals. Specifically this test in in regard to the recognition of liabilities and right-of-use assets in accounting for leases. The edict in these new standards is called the ED/2013/6. Some of the subtle changes are in the discounting of the asset through depreciation and the recognition of revenues from a lease.
This test is specifically geared to help accounting professionals in each of the four participating countries to understand the terms and conditions of lease arrangements in use and the implications of the guidance set forth in ED/2013/6. The organizers of this ‘test’ are looking to find out if these changes create operational or implementation problems. Through this test, they hope to learn what effort it would take to apply these changes on an EU wide scale.
This test begins with a survey. For accounting experts or companies wanting to participate in this ‘test’, it will be necessary for them to contact either the European Financial Reporting Advisory Group through their website or their national accounting standards-setters. They will send you a copy of the questionnaire to be completed. On June 3rd the initial questionnaire will be available. The due date for returning them will be July 31, 2013. If you have any questions about this test, or want to have some input into the overall process of adopting common standards, you are advised to read the press release on the EFRAG website.