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ABSTRACT
The paper presents the results of an analysis of the reconciliations of equity presented as part of the transition from UK Generally Accepted Accounting Principles (UK GAAP) to International Financial Reporting Standards (IFRS) by the largest UK companies. While the overall effect on equity is not significant, the effect of the change in convention on individual line items could have important consequences for financial analysis and contractual obligations. The level of variability between companies means that this change will demand attention to detail by users of financial statements. The paper provides a benchmark for comparison with companies from other accounting traditions making the transition to IFRS.
Acknowledgements
The author is grateful to the assistance of Dr Jackie Fry, Rose Gibson, Frida Kylestorp and Jennie Larsson in collecting data for this paper, and for the comments of two referees.
Notes
1IFRS here is used to encompass all International Accounting Standards, International Financial Reporting Standards and associated interpretations.
2The FTSE 100 consists of the largest 100 UK companies by full market value, subject to eligibility criteria associated with trading records. The constituents of the index are reviewed on a quarterly basis. Further information on the index rules can be found at www.ftse.com/Indices/UK_Indices/Index_Rules/Review_Process/index.jsp
3‘Audited’ may include a ‘special purpose audit report’ or review rather than a full statutory audit report.