Although the implementation date for component accounting has been pushed back to March 2012, it may be worth looking at adopting it sooner rather than later.
At one point, it looked possible that the new requirements on component accounting would be introduced with immediate effect. It quickly became clear, however, that this would have a substantial detrimental effect for many associations because the preparation time required was simply too great to enable the necessary decisions and collection of data to happen with any degree of robustness. The settled position then emerged that March 2011 would be the first year for compliance. This too has now moved to March 2012 as the scale of the task has become clearer.
In our view, this is profoundly good news. From a purely technical perspective, we believe component accounting will benefit the sector. Firstly, it delivers greater consistency and comparability. Secondly, it should provide better financial information and should, over time, save the sector a considerable amount of money from a more in-depth appreciation of lifetime costing. It is clear, though, that many in the sector remain to be convinced. This lack of conviction may lead in some cases to an emphasis on achieving compliance rather than on maximising the benefits from the change. In addition, having worked with several associations who have implemented component accounting in full, and therefore having experienced the change at the sharp end, we fully appreciate the challenges. Many RPs suffer from gaps in information, which would require significant time and effort to resolve. Having an extra year will be helpful in ensuring that the optimum balance is achieved between obtaining the worthwhile benefits from component accounting and minimising the work required, as well as spreading the workload proportionately.
There is nothing to stop RPs who wish to adopt component accounting early. If the decision is made in principle to proceed to 31 March 2011, and the workplan is manageable, it would arguably be wise to start sooner rather than later. RPs would benefit from building up their knowledge of the change process required, so that if need be the timetable can be relaxed if other issues arise or the process proves more challenging than expected. If RPs consciously defer their development of component accounting to try to be ready just in time for March 2012, there is a greater risk that problems might arise.
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