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Accounting in the Isle of Man

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Guidance for preparers of financial statements under Isle of Man company law

Issuing bodies

Guidance has been developed and issued by the Isle of Man Society of Chartered Accountants (IOMSCA) and the Association of Chartered Certified Accountants (ACCA).

Full text sources for the guidance

Guidance for preparers of financial statements under new UK GAAP and Isle of Man company law
Full text of the guidance as issued in October 2016.

History

1994

The Isle of Man Society of Chartered Accountants reached agreement on a draft version of the SORP in late 1994, and in their journal MOSAIC (Spring 1995 edition) stated that they ‘believed that it should be the basis for the minimum disclosure and compliance with accounting standards in all companies' accounts prepared by members in the Isle of Man’.

1995

The draft version of the SORP was sent to all IOMSCA members in January 1995, and responses were requested by the end of February 1995.

In announcing the release of the draft, Peter Vanderpump (Chairman of the Society in 1995) wrote:

I hope you will conclude that it represents best practice and is little different from what I believe most members are currently doing. Adoption by members of the SORP will fill a gap between Isle of Man Companies Acts and accounting standards without bringing any additional burdensome extra disclosure requirements to Isle of Man accounts.

(Source: MOSAIC Issue 13, Spring 1995)

The final version of the Statement of Recommended Accounting Practice – Isle of Man was published later in 1995 with an explanation that read as follows:

The Isle of Man Companies Acts 1931-1993 set out the requirements for audit of and information to be disclosed in the accounts of limited companies.

The UK Companies Act 1985 does not apply in the Isle of Man. There is currently uncertainty amongst members of the Isle of Man Society of Chartered Accountants and the Chartered Association of Certified Accountants as to whether the financial statements of Isle of Man incorporated companies should be drawn up to take account of Financial Reporting Standards, Statements of Standard Accounting Practice and Urgent Issues Task Force pronouncements. As a result both Societies believe that, consequent upon the Isle of Man being a separate jurisdiction, there is need to have a Statement of Recommended Accounting Practice in order to provide guidance to members.

2000-2005

New versions of the Statement of Recommended Accounting Practice – Isle of Man were issued in 2000, 2003 and 2005. The later editions of the SORP no longer include the appendix on information to be disclosed in the accounts found in the 1995 version.

The 2005 SORP (as amended in December 2005) was available in full text on the IOMSCA website at IOM SORP (Amended 2005). This states:

The Isle of Man Companies Acts 1931-2004 set out the requirements for audit of and information to be disclosed in the financial statements of limited companies ... Overall, the Isle of Man Companies Acts provides limited guidance with regard to the contents of financial statements although other Isle of Man statutes prescribe disclosure requirements for regulated entities in the Isle of Man.

Under the present constitutions of the Societies of Chartered Accountants and Chartered Certified Accountants in the Isle of Man ... compliance with this Statement cannot be imposed on members and this Statement therefore represents a recommendation of best practice.

This Statement of Recommended Accounting Practice should apply to all financial statements prepared in the Isle of Man for accounting periods commencing on or after 1 January 2006.

2010

The following update was published in November 2010 issue of eMosaic:

The Committee of the Society has been looking at the status of the Isle of Man SORP as it was felt it was needed to be brought up to date to reflect the advent of the Companies Act 2006, the Companies Act 2009 and the more widespread use of International Financial Reporting Standards. A draft was prepared and circulated to the local ACCA representative and then to the ICAEW technical team who came back with a number of comments. They had two major points: – that the ICAEW did not see it as their role to approve or endorse the document, with it merely being lodged for information purposes only. This is I believe no change to the existing situation, but is an important aspect of the status of the document so users need to be aware. – they also strongly felt that the use of the title ‘Statement of Recommended Practice’ or ‘SORP’ was inappropriate as certainly in a UK GAAP environment, this implies it is a document that has been issued by and has the authority of the ASB. The revised document, which will be termed ‘Guidance for preparers of financial statements under Isle of Man Company Law’ will be posted on our website shortly and is not really in any way revolutionary. The document seeks to collate in one place the various aspects of Isle of Man Company law which affects prepares of Company accounts.

The Guidance for preparers of financial statements under Isle of Man company law was issued in December 2010.

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