Improvements to Financial Reporting Standards
Comments from ACCA
September 2008
ACCA is pleased to have this opportunity to comment on the above exposure draft, which was considered by ACCA's Financial Reporting Committee. I am writing to give you their views. We agree with the proposed improvements except as noted below.
Investment properties
We disagree with the proposal that (in line with IAS40) investment properties under construction should come into the scope of SSAP19 in the same way as completed ones would, with the key effect that they would then need to be stated at open market value and not at accumulated cost. We did not support this amendment to IAS40 because the valuation problems of partially completed properties are greater than those of completed properties and market values are much less likely to be available. Furthermore SSAP19 is not converged with IAS40 at all. We see no case, therefore, for any change in this respect ahead of the ASB's general convergence of UK standards and IFRS.
Section 3 (consequential amendments) (pages 36 to 79)
These mostly concern terminology especially the changes resulting from the amended IAS1 (e.g. statement of other comprehensive income (OCI), statement of financial position instead of balance sheet etc.). While none of these are very significant, they do seem inconsistent in the application of the revised terminologies. So in pages 38-53 (standards themselves) OCI is not used but STRGL is used instead. But in pages 54 to 62 (illustrative examples) OCI is being used. For pages 63 to 89 (basis for conclusions etc.) the proposed text reverts back to existing UK terminology. We would support greater consistency in the terminology used.