Whitley Stimpson clarifies the implications of the ARMA ICAEW debate

Dec 5, 2012

Leading accountancy firm Whitley Stimpson has launched a new fact sheet to help Residents Management Companies (RMCos) and Right to Manage Companies (RTMCos) to understand the implications of the latest proposed changes to service charge accounting.

The company’s informative fact sheet relates to the recent discussions between the Association of Residential Managing Agents (ARMA) and the Institute of Chartered Accountants in England and Wales (ICAEW) surrounding the proposed mandatory disclosure of service charge transactions within RMCo and RTMCo statutory accounts. It neatly summarises the progress of the debate to date and clarifies the respective viewpoints of the two bodies.

“We are committed to ensuring that RMCos and RTMCos keep fully up to date with any new service charge accounting requirements, in order to ensure they operate as efficiently as possible,” explains Nick Bullen, Partner, Whitley Stimpson. “Our expert team is on hand to help explain the implications of the proposed changes and discuss best practice guidelines.”

The ICAEW supports the view that RMCos and RTMCos should disclose service charge transactions in their statutory accounts. ARMA, however, argues that this is unnecessary as the service charge funds are held in trust and should not be reflected in the statutory accounts.

Whitley Stimpson’s new fact sheet summarises the legal advice provided to the ICAEW, clarifies the debate and explains a further important consideration from ARMA. It also highlights the need for those responsible for preparing statutory accounts for RMCos and RTMCos to remain vigilant for the final decision on this matter.

The fact sheet can be downloaded from the Service Charge Accounting section of the Whitley Stimpson website. For further information or to discuss how Nick Bullen and his team can help your company, please visit www.whitleystimpson.co.uk or call 01295 270200.