The UK Accounting Standards Board has proposed that from 2012 all UK companies (including subsidiaries of listed parents) will have to adopt either IFRS for SMEs or full IFRS.

The manner and timing of adoption may impact on:

• UK cash taxes
• Tax planning at a parent and intermediate holding company level
• Distributable reserves and ability to pay dividends

Undertaking a limited impact assessment to identify what form of IFRS is likely to be most suitable for your company, will provide you with the information to determine the appropriate timing of adoption, and whether any of the potential cash tax and tax planning opportunities are relevant. Full IFRS is already permitted, and in certain circumstances may provide cash tax benefits today.

Identifying issues early means there is time to mitigate them by reorganisation or incorporation within decision processes. For example, determining whether to make an irrevocable tax deductible goodwill election will be influenced by GAAP choice, (UK GAAP amortised over 20 years, IFRS for SME amortised over 10 years, IFRS subject to impairment test). PwC has a proven diagnostic process and report that can help you quickly and easily identify the risks and opportunities associated with each option to make an informed decision.

Contact us to find out how we can help.