Kern Roberts says more businesses will face the
challenges of new accounting rules as acquisitions
increase.
The accounting rules for corporate acquisitions for companies
applying international financial reporting standards (IFRS) changed
radically for accounting periods beginning on or after 1 July
2009.
Due to the low level of corporate acquisitions in the last
couple of years, the full effects of these changes are yet to be
felt by UK capital markets. However, acquisitions are starting to
pick up, with purchases of UK businesses by other home-grown
companies growing steadily throughout 2010, reaching a value of
£3.8 billion in Q4 2010. This is the highest figure reported
since Q1 2009 and, amazingly, a higher figure than was recorded
even in Q4 2007. If this upward trend continues, the impact of the
new rules for acquisition accounting will be increasingly widely
felt.
