Pressure is mounting on the UK accounting standard setter to ease the regulatory burden on thousands of subsidiaries when it brings in new standards for small and medium sized businesses.

The UK Accounting Standards Board is about to release a discussion paper on new accounting rules for SMEs announced last week by the International Accounting Standards Board.

The regulations offer mid-sized businesses a set of high quality accounting rules designed for use anywhere in the world.

Under the rules SMEs will make about 200 disclosures each year. However, for businesses which are also subsidiaries there are more than 1,000 disclosures which need to be considered in order to satisfy the reporting requirements of their parent company.

Pressure is building, in part from the audit industry, to ease the disclosure requirements on subsidiaries when the SME reporting rules are eventually adopted by the ASB.

According to critics, subsidiaries will remain bogged down in disclosure requirements, which serve their parent company, while their non-subsidiary counterparts will benefit from reduced disclosures.

PwC senior technical partner Peter Holgate said the ASB should consider easing the disclosure requirement on subsidiaries when they introduce the new rules. ‘It would save time on the part of companies and their auditors who now audit pages and pages of detailed disclosures that hardly anyone reads,’ he said.

He said the vast disclosure requirements for subsidiaries had come about as, ‘an unintended by-product of standard setting’.

ASB chairman Ian Mackintosh described the issue as an area of ‘concern’ that would be canvassed in a forthcoming discussion paper.