Application of SI 2023/975: A Case Study
The Accounting Standards (Prescribed Bodies) (United States of America and Japan) Regulations 2023 (SI 2023/975), sets out transitional provisions affecting UK filing requirements for certain overseas-listed groups.
Frazier & Deeter (FD) supported a listed life sciences group in applying these provisions, ensuring compliance during the transitional period and providing structured guidance for the eventual transition from US GAAP to a UK reporting framework.
This case study demonstrates the approach FD takes when advising organisations on the application of SI 2023/975 or other transitions between financial reporting frameworks.
The Organisation
A consortium of early-stage UK drug development companies consolidated under a UK-registered parent company and listed its shares on an SEC-registered US stock exchange.
At initial listing, the group had a market capitalisation of approximately $200M. By the time the transitional provisions under SI 2023/975 expired, this had grown to over $3B.
FD was engaged to advise on UK statutory filing requirements following the US listing and to support the group through the eventual transition to an alternative UK financial reporting framework.
Frazier & Deeter’s Approach
1. Initial Listing and Application of SI 2023/975
At the point of listing, FD advised management on the availability and practical application of SI 2023/975. Early application of the transitional provisions significantly reduced the cost and complexity that would otherwise have arisen in preparing UK financial statements.
The team reviewed the transactions reflected in the first US Form 10-K and assessed their impact on preparation of the UK parent company’s company-only accounts. This proactive assessment ensured UK compliance requirements were addressed efficiently from the outset.
2. UK Statutory Compliance and Audit Coordination
FD guided the group through detailed Companies Act requirements, including front-half reporting obligations and additional disclosures applicable to quoted companies. This ensured that UK financial statements met all regulatory expectations.
Where conversion from US GAAP to UK GAAP was required for company-only accounts, FD prepared comprehensive technical memoranda documenting the basis for each accounting treatment. These memos streamlined the audit process and could serve as a durable technical reference for future reporting periods.
The team also engaged directly with the group’s UK Big Four auditor on judgemental areas, supporting technical conclusions and facilitating efficient resolution of queries.
3. Ongoing Support During the Transitional Period
In subsequent years, FD built on its established understanding of the group’s operations and reporting processes. Targeted, incremental procedures were performed to maintain compliance with UK requirements while avoiding unnecessary repetition or cost.
The role evolved from implementation support to trusted technical adviser throughout the SI 2023/975 transitional period.
4. Planning for Statutory Expiry
Approximately eight months before the first reporting deadline following expiry of SI 2023/975, FD was engaged to evaluate the appropriate financial reporting framework for UK filings.
A structured assessment was undertaken to evaluate the costs, operational impact and long-term implications of transitioning from US GAAP to either UK GAAP or IFRS.
Based on the group’s structure, investor profile and reporting needs, FD recommended transitioning to UK GAAP. This conclusion addressed the common misconception that companies listed on a stock exchange must prepare UK filings under IFRS. In this case, UK GAAP represented a proportionate and commercially efficient solution.
5. Execution of the US GAAP to UK GAAP Conversion
FD established a defined execution plan, identifying a core internal team and mapping key milestones through to delivery of consolidated UK GAAP financial statements.
The scope included transition of five years of historic financial information from US GAAP to UK GAAP.
The engagement included:
- Preparation of a detailed 120+ page UK GAAP conversion technical memorandum
- Analysis of relevant accounting standards, Companies Act requirements, FRC guidance and leading technical publications
- Identification and minimisation of GAAP adjustments to reduce ongoing tracking complexity
- Preparation of a draft UK GAAP consolidated financial statements template
- Population of the transitioned UK GAAP trial balance
- Direct engagement with the group’s auditors, including leading technical discussions where appropriate
The transition was completed in a controlled and efficient manner, with no disruption to the reporting timetable.
Outcome
Through early planning, effective use of transitional provisions and disciplined execution, the group:
- Avoided unnecessary reporting complexity at listing
- Maintained full UK statutory compliance throughout the transitional period
- Selected a reporting framework aligned to long-term commercial objectives
- Executed a multi-year GAAP conversion efficiently and sustainably
Next Steps
Changes in financial reporting requirements rarely occur in isolation. Whether driven by listing activity, regulatory developments or the expiry of transitional provisions, early technical assessment is critical to avoiding unnecessary cost, complexity and audit risk.
Frazier & Deeter supports organisations through the full lifecycle of reporting change — from evaluating framework options and planning transition strategy to executing complex GAAP conversions and coordinating with auditors.
If your organisation is navigating the application or expiry of SI 2023/975, or considering a move between US GAAP, UK GAAP or IFRS, FD can provide a structured, technically robust approach tailored to your specific circumstances.
Contact us to arrange an initial consultation and discuss your reporting strategy.
Contributors
Ali Amar, Audit Senior Manager
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