United Kingdom (UK) officially left the European Union (EU) on 31 January 2020. The Department for Business, Energy and Industry Strategy has issued guidance to assist UK companies to comply with the UK company law after Brexit. This includes the accounting rules after Brexit.
For examples, UK companies who currently prepare their company accounts using the EU adopted international accounting standards (IAS) must now use the UK adopted international accounting standards (IAS).
Accounting rules transition period
The guidance state a UK company who is currently preparing an account with accounting period beginning before but ending on or after Brexit can continue to use the EU adopted IAS. However, in the subsequent financial year’s account, the company must use the UK adapted IAS.
For instance, if your company’s accounting period is from 1 January 2020 to 31 December 2020. You may continue to use the EU adopted IAS for the year 2020 company accounts. Moving forward to the year 2021, your company must use the UK adopted IAS.
Differences between UK adopted IAS and EU adopted IAS
The UK adopted IAS and the EU adopted IAS is the same at the moment. However, there may be changes later if UK and EU take different accounting approaches to future standards and amendments.
In other words, the current change would only affect your disclosure notes in your company accounts at this stage.
Other changes after Brexit
Another important document which your company must submit to Companies House beside your company accounts is the confirmation statement. There are slight changes to the confirmation statement form also. Make sure you download the most updated form if you are going to submit your statement by post.