§ Mr. Joseph Deanasked the Secretary of State for Trade what is the policy of Her Majesty's Government towards the exposure draft of a current cost accounting standard; and whether he will make a statement.
§ Mr. DellMy predecessor, in a statement on 26th November 1975, announced the Government's general endorsement of the principles of current cost accounting as recommended by the Sandilands Committee, and the decision of the accountancy profession to set up a steering group, under the chairmanship of Mr. Douglas Morpeth, to study the detailed practical problems with a view to current cost accounting becoming the future basis for company accounts. The exposure draft of an accounting standard, which has been prepared by the Morpeth Group, is published by the Accounting Standards Committee today. This proposes the introduction of the system of current cost accounting for company accounts progressively from 1st July 1978.
The Government reaffirm their support for the system of current cost accounting, and its desire that this should become the basis for the preparation of company accounts as soon as practicable. The Government have been consulted by the accountancy profession in the course of preparation of the exposure draft, and endorse the approach which the profession has taken. They agree that the accounting standard should apply to nationalised industries and other public trading entities, subject to any necessary adjustment to meet their special circumstances. The Government are giving 129W separate consideration to the question of using current cost accounts for purposes of taxation and price control.
I pay tribute to the success of the Morpeth Group in producing these proposals in so short a time. I do not doubt that all who are concerned for the welfare of British industry will use the exposure period to study the practical and other implications with a view to the effective and early implementation of current cost accounting.