New consolidation accounting rule may pose some challenges for companies
Add BT as a preferred source[SINGAPORE] The impending new financial reporting standard (FRS) on consolidation, FRS 110, claimed its first victim recently, when United Overseas Bank (UOB) took steps at the end of last month to wind up its associate, United International Securities (UIS).
Under the new standard, which redefines the entities to be consolidated, UIS would need to be consolidated into UOB's accounts; the move would incur additional costs that the group would prefer to avoid.
FRS 110 will become effective for annual periods beginning on or after Jan 1, 2014. The looming adoption date begs the questions: Are companies fully prepared for the change? And just how will the new standard affect financial statements and the companies they belong to?
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