Oh, the Acronyms!
Anyone in the accounting industry – regardless of whether it’s the United States or United Kingdom – knows too well the confusion so many acronyms can sometimes cause. In the United States, it’s the IRS, FTC, ATF, FBI, CIA – and these are just a few of the government agencies that have close ties with the Internal Revenue Service! There are literally thousands of acts, paperwork methods, practices and other aspects that all have their own acronyms.
There is no shortage in the UK, either. For some reason, we all love our acronyms. So, with that thought in mind, we thought it might be a good time to provide a bit of a backstory on the acronyms for all things accounting related. So take a few aspirin for the headache you’re likely to end up with and jump in!
This is the International Accounting Standards and it is synonymous with the International Accounting Standards or IAS. They are the collective accounting standards, subsequent amendments to those standards and the interpretations. They also include future standards and those adopted standards.
Statements of Standards Accounting Practice and used for various tax clauses
Financial Reporting Standards; this can include payroll reporting, plant equipment, revenue, employee benefits, government grants and/or loans and countless others.
IAS (sometimes referred to as IASB)
International Accounting Standards Board that is responsible for the standards, interpretations, issues, adoptions, changes and/or exceptions. Think of it as the “keeper of the accountancy keys”. The Finance Act of 2004 (see below) and in Section 50, a redefining of “generally accepted accounting practices” was provided and included both IAS and UK GAAP. It was to provide guidance especially to foreign countries doing business with companies in the UK. It also works to ensure transparency in everything from leases to revenue to capital assets. Regardless of which standards an entity incorporates, the goal is to keep it streamlined and of course, legal.
FA of 2004
This is the Finance Act of 2004. Before you think, “that was easy”, consider this: There are the “Finance Acts of 2005”. Yes – “acts” – as in plural! Both these acts were aimed at ensuring companies that opted for International Accounting Standards the same tax treatment for companies that chose to continue with the traditional UK GAAP. This brings us to…
The United Kingdom Generally Accepted Accounting Practice. This is in respect to accounts of UK companies that are intended to give “true and fair view for the purposes of the relevant provisions of the Companies Act”
Yes, this isn’t exactly an acronym, but it does refer to the adoption of IAS when one abandons UK GAAP.
As you can see, these definitions and their supporting acronyms play definitive roles within the UK accountancy sector. Each is designed to ensure transparency and fairness. Those who choose accounting clearly have a passion for those careers. For the rest of us, we’ll stick to trying to keep up with the ever changing compliance laws associated with the math and numbers in the accounting world.