On 20 July 2015, the Department for Business, Innovation and Skills ("BIS") published its post-implementation review of the Accounting Standards (Prescribed Bodies) (United States of America and Japan) Regulations 2012.
The review assesses the effectiveness of the regulations, which apply to companies relocating to the UK which have securities registered in the US or admitted to trading on Japanese stock exchanges in order to make the transition to UK GAAP or IAS. The regulations effectively provide a grace period of three years where the companies can continue using US or Japanese GAAP before adopting UK GAAP or IAS.
As the regulations are due to expire on 31 December 2015, BIS is currently considering the following options:
- allowing the regulations to expire and doing nothing;
- extending the regulations so that the financial reporting years after January 2015 are covered infinitely; and
- introduction of a rolling transitional period of a maximum of four years from incorporation in the UK for parent companies that relocate to the UK from the US or Japan to prepare their group accounts in line with UK GAAP or IAS.
BIS will further analyse each of these options and carry out comprehensive impact assessments before deciding which option to pursue, although BIS recommends the third option because the costs for eligible companies of settling in the UK would be lower.
The review is available here:
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