Endorsement of IAS

Endorsement of IAS

Existing EU-adopted IAS                     

At the point of the UK’s exit from the EU, the European Union (Withdrawal) Act 2018 brings into UK law International Accounting Standards (IAS) already endorsed in the EU to provide continuity.

Establishing the UK endorsement body

The International Accounting Standards and European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2019 No. 685 will give power to the Secretary of State to endorse new or amended standards, and to delegate this responsibility to a body. The intention is to delegate these functions to a newly-formed independent UK endorsement body.

The Endorsement Board is currently being established and likely to be operational during 2019 once the appropriate infrastructure and staff are in place.  It will consist of between 11 and 13 Board members plus the Chair.  The Chair will be appointed by the Secretary of State for BEIS, following the public appointments process, while the remaining Board members will be appointed by the Chair from a short list provided by the FRC Nominations Committee.  The Nominations Committee will be required to follow the recommendations on diversity made in the Independent Review of the FRC and the Secretary of State will retain a veto over any of the appointments.  All posts will follow an open and transparent recruitment process.  
 
The Regulation can be found here.

Who will it affect?

All UK companies that apply EU-adopted IAS in their consolidated or individual accounts.

Background

Currently, EU adopted IAS are required to be applied in the consolidated accounts of listed UK companies and may be applied in the parent or individual company accounts of listed UK companies and may be applied by all other companies.  The EU IAS Regulation (1606/2002) is the Regulation which introduced this requirement for all listed companies in the EU. 

The UK Companies Act permits EU-adopted IAS to be applied in the accounts of other companies. 

The EU IAS Regulation requires that, before an IAS can be applied by EU companies, it must go through an endorsement process.
 
The European Financial Reporting Advisory Group (EFRAG) provides advice to the European Commission on the endorsement of IAS in the EU. 

The UK Companies Act permits EU-adopted IAS to be applied in the accounts of other companies. 

The EU IAS Regulation requires that, before an IAS can be applied by EU companies, it must go through an endorsement process.
 
The European Financial Reporting Advisory Group (EFRAG) provides advice to the European Commission on the endorsement of IAS in the EU. 

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