New reporting standards blind-siding AIM companies
The need for nominated advisers to be more proactive and for companies listed on the Alternative Investment Market to move faster to comply with International Financial Reporting Standards (IFRS) are amongst the top findings in the annual AIM survey
The need for nominated advisers to be more proactive and for companies listed on the Alternative Investment Market to move faster to comply with International Financial Reporting Standards (IFRS) are amongst the top findings in the annual AIM survey, conducted by business advisory firm, Baker Tilly, and law firm Faegre & Benson LLP.
According to Stephen Orriss, corporate finance partner at the Bury St Edmunds office of Baker Tilly, less than a quarter of the 150 AIM companies surveyed are fully prepared for IFRS.
He said: “The transition date for AIM companies with December year ends is effectively 1 January 2007, meaning that financial information published after that date will now have to be represented under IFRS.
“AIM companies will need to have their 2006 comparative information and an opening balance sheet at 31 December 2005 in IFRS formats.
“The significant exercise in meeting the compliance of IFRS should not be underestimated. Recently converted main listed companies have found that there are very real differences in the way in which key financial information is now presented, and AIM companies can learn from their experience.”
The Baker Tilly and Faegre Benson survey also revealed that many AIM-floated companies feel that their current nominated adviser, or nomad, could improve.
Research indicated that only 41 per cent of the 150 AIM-floated companies questioned claim to be very satisfied with their current nomad. The main concern facing dissatisfied respondents is the lack of pro-activity.
Orriss said: “Almost all companies agree that the quality offered by the team of nomads is the most important service feature. Respondents also highly value the speed of response, the interest vested in the long term and the ability to raise finances from their nomad.
“Companies should choose their advisers carefully, whether this be for access to a certain level of fundraising, relevant sector expertise or to handle the flotation and provide ongoing advice.”
In the 12 months to May, there were 502 admissions to AIM, including 317 IPOs, raising in excess of £7 billion. AIM is now the leading stock market in the world for growth companies, with a total market capitalisation of £74 billion.