Plans to force UK financial services firms to include “economic cycle reserves” in their financial reporting have come under fire from a leading UK accounting group which says it could end up “obscuring the true financial position of UK PLCs and distracting investors.”

The Institute of Chartered Accountants in England and Wales said it largely supports the other recommendations put forward by Lord Turner, chairman of the Financial Services Authority, in response to to the financial crisis. Specifically the group supports the idea of countercyclical capital buffers, which increase bank capital requirements in good times while reducing them in bad times.