IFRS Causing AIM Company Interim Delays

by Robin Pilgrim, LawAndTax-News.com, London

27 September 2007

The implementation of IFRS (International Financial Reporting Standards) for the first time this year by AIM companies is resulting in delays to interim announcements, research by KPMG has found, leaving a likely glut of announcements in the last week of September, before the 30 September deadline for companies with December year ends.

Whereas in 2006 some 50% of AIM companies with December year ends and a market capitalisation of GBP10 million or more had released their interims by this time in September, this year only around 40% have done so, according to KPMG. Some companies have announced their interims up to three weeks later than before, and others who announced in August in 2006 have yet to release their interim results.

Ginny Stevens, Head of AIM Audit at KPMG, commented: “There is no doubt that the implementation of IFRS is proving a challenge for many AIM companies, and that is resulting in delays. As long as they are communicating this clearly with investors and analysts a short delay is not necessarily a problem in itself, but they will certainly want to minimise any delays to the release of their full year end results at the beginning of next year."

She continued: “There are signs that some AIM companies are still not investing the necessary time and resources in IFRS implementation, and this is something that those companies will need to address quite urgently. Accounting for acquisitions and for deferred tax are the areas presenting the greatest IFRS challenge to AIM-listed firms.”

Companies with December year ends have until three months after their half year point to release their interim results, or in a worst case scenario risk the suspension of their shares – which is the 30 September. KPMG’s research suggests that around 120 of the companies surveyed will need to release their interims between now and the end of the month – a flood of information that may tax the resources of analysts too.

Ms Stevens concluded: “As we saw with main listed companies, once implementation has been done the task becomes much easier in subsequent years. It is natural that there have been some delays and this is no cause for alarm in itself. But the pressure will only rise from here on in for AIM companies to get on top of their full year end results and communicate them to the market on time.”

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