All the standards we are to review have been developed and published by either the Accounting

Standards Committee (ASC)(via the Consultative Committee of Accountancy Bodies (CCAB))

or the Accounting Standards Board (ASB). It will be useful to undertake a brief review of the
historical background of these UK standard setting bodies.

The ASC was first established in 1970 as the Accounting Standards Steering Committee (ASSC).
The establishment of this committee can be partly attributed to developments in the USA in the
1950s and 1960s but its creation was primarily a reaction of the main accountancy bodies to
considerable criticism of the profession, particularly in the 1960s. These criticisms resulted from
several financial scandals which highlighted the lack of standardisation and consistency in
accounting principles and practices employed by companies at the time. The establishment of the
ASC (ASSC) was an attempt to renew confidence in annual reports and the auditing procedures
and prevent government interference in the functioning of the profession. The role of this
standard setting body, and therefore the historic foundations on which standards are set, can be
clearly seen from the following objects and terms of reference laid down in the constitution of
the ASC (ASSC):

Objects: The Committees objects shall be to define accounting concepts, to narrow differences
of financial accounting and reporting treatment and to codify generally accepted best practice in
the public interest.

The historical development of accounting standards - part 1

Steve Lawrence
01 Apr 2000 (http://www.accaglobal.com/archive/2888864/30976)

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History and Development

This timeline highlights some of the key dates in the development of UK accounting standards
from the 1940s to the present. To find out more, take a look at our suggestions for further
reading.

1942

The Taxation and Financial Relations (T&FR) Committee of the ICAEW was established in
1942 and was asked by the council of the ICAEW to "consider and make recommendations to
[the council] on certain aspects of the accounts of companies" and to publish "approved
recommendations for the information of members" (The Accountant, 12 December 1942).

The first 'Recommendations on Accounting Principles' were published in December 1942 on the
subjects of Tax Reserve Certificates and War Damage Contributions, Premiums and Claims.
These recommendations, and those that followed, provided members of the ICAEW with early
guidance on accounting practice.
Initially the recommendations were published in The Accountant. The first collected edition of
the recommendations was published in book form by Gee & Co in 1944 and the
recommendations later appeared in the Members' Handbook. Most had been withdrawn by the
time Technical Release 391 was published in 1980.

Browse details of our holdings of the Recommendations on Accounting Principles

1969

At a press conference on 11 December 1969 the ICAEW released a 'Statement of Intent on

Accounting Standards in the 1970s' which expressed the determination of the council to advance
accounting standards, setting out the steps the Institute felt would be necessary to achieve this.

The Accountant ('Recte Numerare in the 70s', 18 December 1969) commented that the
importance of this development could be "likened only to the inauguration of the Institute's series
of recommendations a quarter of a century ago."

January 1970

The ICAEW established the Accounting Standards Steering Committee in January 1970 with
"the object of developing definitive standards for financial reporting" ('History of the Accounting
Standards Committee', Accounting Standards). The Irish and Scottish Institutes became members
of the Accounting Standards Steering Committee in the same year, followed by the Association
of Certified Accountants (now the ACCA) and the Institute of Cost and Management
Accountants (now CIMA) in 1971.

April 1970

On April 29th 1970 the ICAEW published the Survey of Published Accounts, 1968-69 which
highlighted the continuing degree of variation in accounting treatments in use at this time. The
President used this opportunity to re-state the ICAEW's aim to implement the statement of intent.
The Accountant ('Precept and Practice', 30 April 1970 and 'Institute's Approach to Accounting
Standards', 7 May 1970)

1971

The first Statement of Standard Accounting Practice (SSAP) on Accounting for the results of
associated companies (SSAP 1) was issued in January 1971. A total of 34 statements (or revised
statements) were released between 1971 and 1990.

Browse details of our holdings of SSAPs issued between 1971 and 1990

Initially the Statements of Standard Accounting Practice (SSAP) sat alongside the
'Recommendations on Accounting Principles' issued by the ICAEW. The explanatory foreword
to the 1977 edition of Accounting Standards stated: "In so far as they are not replaced by
Statements of Standard Accounting Practice, the Council's 'Recommendations on Accounting
Principles' will continue in effect as guidance statements and indicators of best practice. They are
persuasive in intent and departures from them do not necessarily require disclosure as do
departures from accounting standards"

1976

CIPFA joined the Accounting Standards Steering Committee.

In 1976 the name of the Accounting Standards Steering Committee (ASSC) was shortened to the
Accounting Standards Committee (ASC) and its constitition was revised. The Accounting
Standards Committee became a "joint committee of the six member bodies who then acted
collectively through the Consultative Committee of Accountancy Bodies" (Introduction,
Accounting Standards 2006/07). Later, in 1985, the ASC became a committee of the CCAB.

1987-1988

In November 1987 the CCAB appointed Sir Ron Dearing to review the standard setting process.
The final report 'The making of accounting standards- report of the Review Committee'
(published in September 1988) recommended the establishment of the Financial Reporting
Council, the Accounting Standards Board and the Review Panel.

1990

In 1990 the Government announced the establishment of a new Financial Reporting Council
(FRC). The FRC was charged with promoting good financial reporting through two subsidiary
bodies: the Accounting Standards Board, which replaced the ASC on 1 August 1990, and the
Financial Reporting Review Panel (FRRP).

On its creation the Accounting Standards Board (ASB) adopted a number of SSAPs that had
been issued by the ASC so that they were brought within the legal definition of accounting
standards according to the Companies Act 1985. All accounting standards developed by the ASB
since 1990 have been issued as Financial Reporting Standards (FRS).

1991

The newly established ASB was to assisted by an Urgent Issues Task Force (UITF) which held
its first meeting in 1991.

The Urgent Issues Task Force (UITF) was established to investigate areas where conflicts or
unsatisfactory interpretation of an accounting standard or Companies Act provision exists or is
may develop in the future. The UITF reaches a consensus on them and issues abstracts to guide
in the preparation of financial statements ('The Force and Financial Reporting', Accountancy,
June 1991 p27 and 'Introduction to the first consensus pronouncement of the Urgent Issues Task
Force', Accountancy, September 1991, p106).
The first abstract issued by the UITF was 'Convertible bonds - supplemental interest/premium'
which was released on 24 July 1991.

2004

In 2004 the Government took the decision to strengthen the regulatory system in the UK
following the major corporate collapses in the US. This led to the FRC's role being extended to
become the single independent regulator of the accounting and auditing profession as well as
being responsible for issuing accounting standards and dealing with their enforcement.

The present FRC and its subsidiary bodies are funded jointly by the accountancy profession, the
financial community and the government.

UK Accounting Standards
Financial Reporting Standards (FRSs) and Financial Reporting Exposure Drafts (FREDs)

Since 1 August 1990, UK accounting standards have been issued by the Accounting Standards
Board (ASB). All accounting standards developed and issued by the ASB are known as Financial
Reporting Standards (FRSs). The standards include the FRSSE (Financial Reporting Standard for
Smaller Entities). FRSs are first usually issued as Exposure Drafts for consultation that are
known as Financial Reporting Exposure Drafts (FREDs).

Comments received on discussion papers and exposure drafts are available for public inspection
in the Library & Information Service by arrangement with the Librarian.

Sources for FRSs

Statements of Standard Accounting Practice (SSAPs)

SSAPs were the previous generation of accounting standards approved and issued by the
ICAEW and other accountancy bodies following recommendations from the ASC. One of the
first decisions of the newly formed ASB was to adopt a number of the SSAPs issued by the ASC
so that they were brought within the legal definition of accounting standards according to the
Companies Act 1985. Consequently some SSAPs are still in force today.

Sources for SSAPs

Statements of Recommended Practice (SORPs)

The ASC developed the first SORPs. These are specialist standards for particular industries or
sectors. The ASB no longer issues its own SORPs. Instead it recognises other bodies power to
develop SORPs in order to provide guidance on the application of accounting standards to
specific industries or sectors. SORPs are issued by and available from appropriate bodies for
those industries or sectors. For example, the Charity SORP is issued by the Charity Commission.
SORPs are usually first issued for consultation as Exposure Drafts. The ASB does not approve
such SORPs. However, if they are developed in accordance with certain ASB guidelines it will
issue a 'negative assurance statement' to be appended to the SORP that confirms that it does not
contain any provision that is inconsistent with the ASB's principles and policy.

Sources for SORPs

Urgent Issues Task Force (UITF) abstracts

The UITF is part of the current standard setting arrangements and assists the ASB by
investigating areas where conflicts or unsatisfactory interpretation of an accounting standard or
Companies Act provision exists or is may develop in the future.

The UITF reaches a consensus on the issues it investigates and publishes abstracts to guide the
preparation of financial statements. In order for accounts to present a true and fair view, they
must comply with UITF Abstracts. UITF Abstracts and Information Sheets containing news of
the current work of the UITF are available to download from the UITF pages of the ASB
website.

Generally Accepted Accounting Practice (GAAP)

The acronym GAAP stands for 'Generally Accepted Accounting Practice' or alternatively
'Generally Accepted Accounting Principles' or 'Generally Accepted Accounting Policies'. GAAP
is a term used to describe the rules generally accepted as being applicable to accounting practices
as laid down by standards, legislation or upheld by the accounting profession.

UK GAAP and GAAP Comparisons

How to obtain UK Accounting Standards and SORPs

CCH

CCH are publishers of books, manuals, electronic publications and subscription products in the
key areas of accountancy, audit, taxation, financial reporting and business. The CCH titles
include the annual edition of 'Accounting Standards' which includes the complete texts of all UK
Statements of Standard Accounting Practice and Financial Reporting Standards extant at 30
April of the current year.

The Accounting Standards Board (ASB) Website

The ASB website provides summaries and full text of most standards in issue and information on
current projects. The Urgent Issues Task Force section of the website includes the full text of
UITF abstracts and information sheets. You can register to receive free email notifications of
new ASB publications and to receive the ASB newsletter 'Inside Track'.
SORP issuing bodies

An updated list of SORPS in issue or proposed is available through the ASB website along with
details of their issuing bodies. The individual SORP issuing bodies differ in the way that they
provide access to their SORPs. Some are freely available online whilst others are only available
for purchase as print publications.

To find out about the availability of individual SORPs take a look at our Sources for SORPs
page.

ICAEW Library & Information Service

The ICAEW LIS provides an enquiry service for ICAEW members, students and other entitled
users. As part of this service the LIS can loan books and supply documents from our collection
by email, fax and post.

You can find out about the material we hold on each standard through the following links:

Sources for FRSs

Sources for SSAPs

Further Reading and Research

Taxation and Financial Relations (T&FR) Committee

The Taxation and Financial Relations (T&FR) Committee was renamed Taxation & Research
(T&R) Committee in 1949 and the Technical Advisory Committee (TAC) in 1964. The
committee's powers were transferred to other Institute Committees in May 1967. The committee
books from 1942-1950 are held at Guildhall Library in London.

Accounting Standards Committee

You can read the book 'Financial Reporting in the UK: A History of the Accounting Standards
Committee, 19691990' online. This title is available to ICAEW members, students and other
entitled users through our collection of eBooks.

The ICAEW Library & Information Service holds a number of ASCC publications (1970-1976),
ASC publications (1976-1990) and a collection of comments received on discussion papers and
exposure drafts.

The John Rylands University Library holds a special collection of ASC and ASSC papers (1952-
1990). Further details are avauilable from their website: Accounting Standards Committee
Archives
Ref.

http://www.icaew.com/index.cfm/route/156255/icaew_ga/en/Technical_and_Business_Topics/G
uides_and_publications/Knowledge_guides/em_UK_Accounting_Standards_em