The rise and fall of the ASC

Article Abstract:

The UK Accounting Standards Committee (ASC) was begun 20 years ago because of a public outcry over the lack of standards in financial reporting and the large number of accounting options open to firms. The downfall of the ASC is rooted in the erosion of support from the preparers and users of financial statements beginning with the issuance of the Sandilands report which recommended a system of current cost accounting (CCA). The Dec 1976 exposure draft on CCA was met by a barrage of criticism. The ASC's 1983 proposal to issue Statements of Recommended Practice for industries, statements which were not standards, led to debate on the standard setting process and reflected a decline in the issuance of standards between 1976 and 1984. The issuance of Statement of Standard Accounting Practice 22, Accounting for Goodwill, led to such opposition that support for the ASC effectively disintegrated, leading to the Dearing Report on the standard setting process, which led to the disbanding of the ASC and the creation of the new Accounting Standards Board.

Accounting Standards Board, Accounting Standards Committee

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Making corporate reports less valuable

Article Abstract:

The Institute of Chartered Accountants of Scotland report, Making Corporate Reports Valuable (MCRV), offered as a basis for creating a system for financial reporting in the UK, ignores constraints on accounting standards-setting in the UK, including legal requirements, directives, and international standards. MCRV recommended that companies should value assets at net realizable value (NRV), ignoring the difficulties of making such a valuation. MCRV favors NRV to deprival value, which is the basis of costs accounting. The MCRV recommendations do away with the profit and loss account, replacing it with an operations statement, distributions statements, and change in financial wealth statements. This eliminates a bottom line that is calculable on a rational basis and calls for more disclosure rather than less. The lack of a profit and loss account and the calculation of assets at NRV does not provide the information a company needs to be run effectively.

Laws, regulations and rules, Reports, Corporations, Corporations, British

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Bridging the expectation gap

Article Abstract:

A panel discussion concerning the expectation gap arising from differences between what the users of corporate accounts expect and what is actually provided is presented. Panel participants include SR VP of the Institute of Chartered Accountants of Scotland Ian Tegner, Paribas Asset Management Managing Director David Damant, and Coopers & Lybrand Deloitte's head of audit practice Brian Jenkins. Tegner believes that the media have blown the problem of the expectation gap out of proportion, but that it must be dealt with by providing more information in corporation reports about the purposes of the accounts and the responsibility for them. Damant objects to injecting values into accounts, and is specifically opposed to creating a relationship between a firm's worth and the balance sheet. Jenkins believes that accounts will become worthless if their reflection of a firm's reality is allowed to deteriorate.

Management, Accounting and auditing, Damant, David, Corporation reports, Company reports, BNP Paribas (Abu Dhabi), panel discussion, Tegner, Ian, Jenkins, Brian, Coopers & Lybrand Deloitte

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