Goodbye to single performance indicators

Article Abstract:

The Accounting Standards Board has issued Financial Reporting Standard No 3 (FRS 3) with the aim of resolving the problems that emerged in the interpretation of Statement of Standard Accounting Practice No 6 (SSAP 6). It is thus not surprising that FRC 3 introduces fairly radical changes to the profit and loss (p&l) account since most of the comments about SSAP 6 centered on its inadequacy in enabling users to derive an accurate assessment of financial performance. Notable among the many changes mandated by FRC 3 is the requirement that three specific types of item be placed in the p&l account, namely, profits and losses resulting from the disposal of fixed assets, costs of a organizational restructuring, and profits and losses on the sale of a business unit. These changes all come into effect for financial statements prepared for periods on or after Jun 22, 1993.

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Amendment to FRS 5 'Reporting the Substance of Transactions': Insurance Broking Transactions and Financial Reinsurance

Article Abstract:

The Accounting Standards Board (ASB) has issued an amendment to Financial Reporting Standard (FRS) 5. The amendment which is entitled 'Insurance Broking Transactions and Financial Reinsurance', defers the effectivity of certain provisions of FRS 5 which are related to reinsurance and insurance brokerage. The new amendment is applicable to financial transactions in England, Ireland and Wales and is to be enforced by the Institute of Chartered Accountants in England and Wales and the Institute of Chartered Accountants in Ireland. The text of the new amendment, which was published in Dec. 1994, is provided. It contains two insertions into Paragraph 39 of FRS 5 and provides an explanation for the reasoning behind these amendments.

Regulation, Licensing, and Inspection of Miscellaneous Commercial Sectors, Accounting Services Regulation, Accounting services, Accounting law

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A footnote, rather than a headline

Article Abstract:

The Accounting Standards Board (ASB) has introduced a new type of primary financial statement to add to the three established types already in wide use: the profit and loss account, the balance sheet and the cash flow statement. This new primary financial statement is the statement of total recognized gains and losses (STRG&L). This new financial reporting format was formally introduced in Financial Reporting Standard 3, which is better known by its title 'Reporting Financial Performance.' Oddly enough, the STRG&L seems to have attracted only the slightest sign of interest among auditors and directors. One reason is that the new statement is considered to be derivative, being formed from data taken elsewhere in the accounts.

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