Article Abstract:
Increasing competition in the UK financial services market forced the Abbey National Building Society to become a private company. Abbey National PLC, with assets in excess of 31 billion pounds sterling, is now allowed greater flexibility under Bank of England rules than it had as a building society. Finance Director James Tyrrell introduced proper financial reporting when he joined Abbey in 1982, and he has shifted the emphasis to bottom line thinking and profit. Tyrell sees the advantages of conversion as the greater flexibility afforded a PLC. Abbey's future plans include: strengthening its position in the mortgage market and expanding its branch network; expanding into insurance and other financial products; and developing its international operations. Abbey has spun its treasury department off to an arms length subsidiary in order to facilitate its running as a profit maker.
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Article Abstract:
The Statement of Standard Accounting Practice number 20 (SSAP 20) causes wild fluctuations in otherwise normal accounts because of its requirement that long-term foreign monetary assets and liabilities be reflected in the profit and loss accounts annually. The problem stems from the fact that SSAP 20 requires that long-term monetary items be translated at the current rate on each balance sheet date instead of the rate prevailing when the transaction took place. The standard should be changed to require that the long-term monetary item be translated at the historic rate until some time near maturity, and then changes can be made to the profit and loss account if an exchange loss seems likely.
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Article Abstract:
University of Pennsylvania's Wharton School of Business emeritus professor David Solomons has been awarded the 1989 International Award of the Institute of Chartered Accountants in England and Wales. Solomons first started teaching as a prisoner of war in Nazi concentration camps during World War II. After the war, he served on the accounting faculties of the London School of Economics, the University of California, Berkeley, and Bristol University. Personal accomplishments include the 1973 Solomons report on training and education of chartered accountants and participation in the creation of the US Financial Accounting Standards Board in the US.
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