UK: Brexit: The International Accounting Standards and European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2019 (draft)

A draft of the International Accounting Standards and European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2019 were published today: see here. The accompanying (draft) explanatory memorandum is available here and this explains the purpose of the Regulations as follows (paras. 2.6, 2.7 and 2.8):

After the UK’s exit from the EU, the EU acquis will be frozen in time and directly applicable EU law will become UK legislation, by virtue of provisions in the European Union (Withdrawal) Act 2018. This means that existing EU-adopted IFRS will be brought into UK law, but frozen as at exit day, and public companies listing in the UK will be required to produce their consolidated accounts in accordance with these standards. However, as the UK will no longer be a member of the EU, future adoptions, interpretations and amendments of IFRS by the EU will no longer apply in the UK. This means, to maintain up-to-date usage of IFRS, the UK requires a national framework to adopt new standards and/or changes to existing standards.

It is in the UK’s interest to maintain convergence with IFRS after EU Exit. The standards are used as the basis for preparing company accounts globally, in over 140 jurisdictions including 15 out of the 20 G20 countries, providing comparability and transparency to investors in capital markets. The instrument is therefore consistent with the UK Government’s policy that, after departure from the EU, the UK will retain its reputation as a global hub for business, while avoiding costs from unnecessary disruption.

This instrument provides for a national framework for endorsement and adoption of IFRS after departure from the EU."