Option (c)
The firm decides that it will deliver a ‘short’ accountant’s report, followed by an extended report. The ‘short’ report (on the old form) covers the first part of the transitional accounting period, when the firm was operating the old rules. Its subsequent accountant’s report (on the new form) covers the rest of the transitional accounting period, when the firm was operating the new rules, plus the whole of the next accounting period.
The firm will need to ask the Law Society to send an accountant’s report form (the old form) in time for preparation of the accountant’s report on the first part of the transitional accounting period.
For the ‘short’ report, covering the first part of the transitional accounting period, the reporting accountant will have to select at least two comparison dates. For the extended report, covering the second part of the transitional accounting period plus the whole of the next accounting period, the rules contain no requirement that more than two comparison dates be selected, although that lies within the discretion of the accountant.
The reporting accountant should endorse at the top of the ‘short’ report: ‘Short report under rule 50(5)(c) for the period ....... to ......., being the 1st part of the transitional accounting period’. The extended report should be endorsed: ‘Extended report for the period ....... to ......., including the 2nd part of the transitional accounting period’.
Example: The firm implements the new rules on 1st May 2000, part way through its accounting period, which runs from 1st September to 31st August. The ‘short’ report (on the old form) will cover the eight-month period 1st September 1999 to 30th April 2000, to be delivered by 30th October 2000. The extended report (on the new form) will cover the 16-month period 1st May 2000 to 31st August 2001, to be delivered by 28th February 2002.
Option (d)
The firm delivers an extended accountant’s report (on the old form) for the last complete accounting period when the firm operated the old rules, plus the first part of the transitional accounting period, when the firm was continuing to operate the old rules. The firm subsequently delivers a report (on the new form) to cover the remainder of the transitional accounting period, when the firm was operating the new rules.
The firm will need to ask the Law Society not to send an accountant’s report form at the normal time for a report on the last complete accounting period when the firm operated the old rules. The firm will also need to specify their implementation date for the new rules.
For the extended report, covering the last complete accounting period under the old rules plus the first part of the transitional accounting period, the rules contain no requirement
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