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Policies changed after accounts panel review

Heather Connon,City Correspondent
Monday 10 August 1992 23:02 BST
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TWO companies are to change their accounting policies after a review of their accounts by the accounting watchdog, the Financial Accounting Review Panel.

Associated Nursing Homes is to restrict its capitalisation of start- up costs to those incurred in the first three months of opening a new home. After that, all costs will be charged against profits.

Previously, it capitalised these costs until the home had reached break-even occupancy levels. The time taken to achieve that level varied from home to home, with the most recent taking five months.

Williamson Tea is to provide fuller disclosure of a number of accounting policies in its accounts for the year to March, due to be published later this month.

The panel had been concerned about the explanation of its treatment of a number of items. These included the fact that it did not depreciate some leasehold and lease rental properties, and that additional depreciation charged because of asset revaluations was charged to the capital reserve, rather than against profits.

The panel has decided to take no further action in any of the cases, and previous year's accounts were not restated. The first company to be criticised by the panel was Williams Holdings, which was required to change its calculation of earnings per share to include exceptional items.

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