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30 September 2003: European endorsement of IFRS is completed
The European Commission has formally adopted a regulation endorsing IFRS and related interpretations, as Recommended by the Commission's Accounting Regulatory Committee in July. The endorsement confirms that IFRS must be followed under the terms of the general IAS Regulation adopted by the European Parliament and the Council in 2002. The Commission's endorsement covers all existing IASB standards and interpretations except for IAS 32 and IAS 39 and related SICs 5, 16, and 17. IAS 32 and 39, which deal with the accounting and disclosure of financial instruments, are not included because they are currently being revised by the IASB. The EC has also announced that the endorsed IFRS will shortly be published in the official EU languages in the Official Journal of the EU. In total, there are at present 34 existing IASs (including IAS 32 and IAS 39) and 31 existing interpretations (including SICs 5, 16, and 17), which cover about 1,500 pages. Click for EC Press Release (PDF 69k).
29 September 2003: SEC Chairman's remarks on convergence
In a Speech before the Foreign Policy Association in New York, SEC Chairman William H. Donaldson made the following comments about the convergence of IFRS and US GAAP:
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We are also working hard to accelerate progress on a number of other important international issues. One such issue is the convergence of international accounting standards and the Generally Accepted Accounting Principles used in the United States. While sounding arcane, this issue has major implications for cross-border business. If the difficult issues involved in convergence can be resolved — no easy task for sure — investors and issuers alike will benefit, by increasing comparability and reducing the cost of capital.
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29 September 2003: IASB Board member Harry Schmid will retire in March
IASB Member Harry K. Schmid will retire from the Board in March 2004, the IASC Foundation has Announced (PDF 13k). Before joining the IASB, Mr. Schmid served as a Senior Vice President of Nestlé, responsible for corporate reporting, and was involved in preparing Nestlé's financial statements for 40 years. The Trustees of the Foundation have begun a Search (PDF 31k) for another individual with a background in the preparation of financial accounts as Mr. Schmid's successor.
27 September 2003: IASB and SAC meeting schedule for 2004
The International Accounting Standards Board will meet monthly (except August) in 2004, including three meetings with the Standards Advisory Council (SAC). The following is the meeting schedule for the balance of 2003 and 2004. In the future you can find it by clicking "Future IASB Meetings" at the left:
| I A S B and S A C M E E T I N G S 2 0 0 3 |
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Toronto, Canada | 20 and 22-24 October 2003
Meeting will include joint sessions with the US Financial Accounting Standards Board and the Accounting Standards Board of Canada |
London, UK | 17-19 November 2003
20-21 November Meeting with Standards Advisory Council |
London, UK | 17-19 December 2003 |
| I A S B and S A C M E E T I N G S 2 0 0 4 |
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London, UK | 21-23 January 2004 |
London, UK | 18-20 February 2004
23-24 February 2004 Meeting with Standards Advisory Council |
London, UK | 17-19 March 2004 |
London, UK | 21-23 April 2004
26-27 April 2004 Meeting with chairs of Partner National Standard Setters |
London, UK | 19-21 May 2004 |
Oslo, Norway | 21-23 June 2004
24-25 June 2004 Meeting with Standards Advisory Council |
London, UK | 21-23 July 2004 |
London, UK | 22-24 September 2004
27 September 2004 Meeting with World Standard Setters
28 September 2004 Meeting with chairs of Partner National Standard Setters |
Norwalk, Connecticut, USA | 20-22 October 2004 |
London, UK | 15-17 November 2004
18-19 November 2004 Meeting with Standards Advisory Council |
London, UK | 15-17 December 2004 |
27 September 2003: IFRIC meeting schedule for 2004
The International Financial Reporting Interpretations Committee has scheduled seven meetings during 2004. All will be held at the IASB's offices in London:
| I F R I C M E E T I N G S 2 0 0 3 |
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London, UK | 30 September-1 October 2003 |
London, UK | 2-3 December 2003 |
| I F R I C M E E T I N G S 2 0 0 4 |
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London, UK | 3-4 February 2004 |
London, UK | 23-24 March 2004 |
London, UK | 4-5 May 2004 |
London, UK | 3-4 June 2004 |
London, UK | 29-30 July 2004 |
London, UK | 7-8 October 2004 |
London, UK | 2-3 December 2004 |
25 September 2003: Fourth update of UK Convergence Handbook is available
The Institute of Chartered Accountants in England and Wales has issued the fourth update of its Convergence Handbook, originally published in November 2000. The Handbook compared IFRS and UK GAAP. This new update, which replaces all previous updates, reflects the effects of standards and exposure drafts issued by the IASC, the IASB, and the UK Accounting Standards Board up to the end of August 2003. Click to download the Convergence Handbook Update (PDF 291k). You can find More Information here.
25 September 2003: New Australia Accounting Alert posted
We have posted the 22 September 2003 Australia Accounting Alert newsletter (PDF 111k), which contains an update on recent releases issued by the Australian Accounting Standards Board as part of the convergence process with International Financial Reporting Standards. You can download prior editions of Deloitte's Australia Accounting Alert Here.
25 September 2003: Five draft Interpretations expected before year end
In a presentation at the IASB's meeting with world standard setters on 22 September 2003, Kevin Stevenson, chairman of the International Financial Reporting Interpretations Committee (IFRIC), announced that IFRIC is likely to issue five draft interpretations in the fourth quarter of 2003. They will deal with:
Two Draft Interpretations (D1 on Emission Rights and D2 on Decommissioning) are currently outstanding. IFRIC will meet at the IASB's offices in London on 30 September and 1 October 2003. See news story of 11 September 2003 for the agenda.
24 September 2003: IASB plans for releasing final Standards
The IASB is committed to providing a 'stable platform' for the transition to IFRS in Europe in 2005. 'Stable platform' means issuing, by 31 March 2004, all of the new and revised Standards that will be required for companies adopting IFRS in 2005, with no further changes until after 2005. At its meeting on 22 September 2003 with representatives of the accounting standard setting bodies in 40 countries, the IASB announced the following plans for releasing various Standards currently under development:
IASB's Publications Programme for the 2005 "Stable Platform"
Fourth Quarter 2003:
- Improvements – 10 revised IAS by 31 October and 2 more revised IAS by 30 November
- Amendments to IAS 32 and IAS 39 – by 30 November (without the proposed portfolio hedging amendments)
- Extractive Industries Exposure Draft – by 31 October
First Quarter 2004 (all likely in March 2004):
- Share-based payment
- Business Combinations Phase I – 3 Standards
- Insurance Contracts Phase I
- Portfolio Hedging Amendments to IAS 39
- Asset Disposals and Discontinued Operations
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The Board also announced that each of its final Standards and Interpretations will be made available on its Website without charge (not including basis for conclusions and implementation guidance). The final Standards will be placed on the Board's website in "preliminary form" as soon as the ballots have been received from the 14 IASB members. "Preliminary form" means that there may be some final changes made in the process of preparing the printed versions. If any such changes are made, a revised version will be placed on the IASB's website. The Standards, along with the bases for conclusions and implementation guidance, will be available for purchase in printed form.
24 September 2003: Applying IFRS in the extractive industries
The IASB has approved in principle the proposals that will be included in an exposure draft on how companies in the mining and oil and gas industries should apply existing IFRS. Exploration costs would be added to the scopes of both IAS 16 and IAS 38 (those Standards currently exclude such costs). However, the exposure draft will propose that both current IFRS appliers and first-time adopters will be allowed to continue their current accounting practices for exploration costs.
22 September 2003: New China Today newsletter posted
We have posted the September 2003 China Today newsletter (PDF 309k), which contains an update on accounting standards in the People's Republic of China. You can download prior editions of China Today from our China Page.
20 September 2003: Notes from third day of the September IASB meeting
We have combined our notes from the three-day Board meeting on 17-19 September 2003 into a Single Page.
19 September 2003: Notes from second day of the September IASB meeting
We have combined our notes from the three-day Board meeting on 17-19 September 2003 into a Single Page.
18 September 2003: Notes from first day of the September IASB meeting
We have combined our notes from the three-day Board meeting on 17-19 September 2003 into a Single Page.
17 September 2003: Financial Stability Forum cites IASB progress
At its meeting in Paris on 10 September 2003, the Financial Stability Forum (FSF) discussions focused on three topics: vulnerabilities in the international financial system; market foundations and corporate governance; and offshore financial centers. Regarding market foundations and corporate governance, the FSF said: "Accounting standards. Members noted that good progress has been made in the IASB and FASB short-term convergence project and in strengthening accounting standards internationally. However, some complex and difficult issues remain unresolved. Reaching an international consensus on these issues will require consultation on all sides, and the larger objectives that motivate the need for convergent accounting standards – including financial efficiency, stability and transparency – should be kept in mind." Click for News Release (PDF 157k).
17 September 2003: Latest Accounting Roundup newsletter is available
We have posted the 15 September 2003 Edition of Accounting Roundup from Deloitte & Touche (USA). Topics covered include IFRIC Draft Interpretation D2, Changes in Decommissioning, Restoration and Similar Liabilities. Click to download this or any of the prior issues of Accounting Roundup or our new EITF Roundup newsletter.
15 September 2003: IASB will meet this week and the next
The International Accounting Standards Board will hold its monthly meeting on 17-19 September 2003 at its offices in London. A meeting of World Accounting Standard Setters will take place on 22 September 2003, and the Board will meet with representatives of its partner standard-setters on 23 September 2003. The latter two meetings are at the Renaissance Chancery Court Hotel, London. All meetings are open to public observation.
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AGENDA OF THE IASB MEETING 17-19 SEPTEMBER 2003
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14 September 2003: Report on Sarbanes-Oxley Act after one year
The US House of Representatives Committee on Financial Services has released a report, Rebuilding Investor Confidence, Protecting U.S. Capital Markets, (PDF 891k) reviewing the impact of the Sarbanes-Oxley Act of 2002 one year after its enactment. A section of the report reviews how the Act has begun to create "a level playing field for international companies and auditing firms", including a review of steps taken by the European Commission. The report also includes a summary of the findings of a study by Huron Consulting Group of restatements of financial statement filed with the Securities and Exchange Commission. For the 12 months ended 30 June 2003, 354 public companies restated earnings because of accounting errors. Of those, 158 restatements were filed during the first six months of 2003. Problems applying accounting rules, human and system errors, and fraudulent behavior were the three primary causes for accounting restatements.
11 September 2003: FASB makes some stock compensation decisions
At its meeting yesterday, the US Financial Accounting Standards Board agreed to delay issuance of an exposure draft on stock-based compensation until the first quarter of 2004. The FASB also expressed a preference for using a specific mathematical model – known as the binomial model – to measure the fair value of employee share options because that model is better able to take into account such factors as performance conditions and vesting and holding periods than is the Black-Scholes model. The IASB's ED 2, Share-Based Payment, would not prescribe any particular model. The IASB's current timetable calls for issuing a final IFRS in the first quarter of 2004.
11 September 2003: IFRIC announces upcoming meeting agenda
The International Financial Reporting Interpretations Committee (IFRIC) will meet at the IASB's offices in London on 30 September and 1 October 2003. Topics on the agenda are:
10 September 2003: Analysis of the impact of ED 5 on the insurance industry
Standard & Poor's, the securities analysis and ratings agency, has published a report, International Accounting Standards: Threat or Opportunity?, analysing the potential impact of the IASB's Exposure Draft 5, Insurance Contracts on the insurance industry. S&P concludes that while initially insurers and reinsurers will find the introduction of IFRS to be traumatic, "ultimately, the capital markets, consumers, and the more sophisticated financial statement users will reward insurers for their improved transparency rather than penalizing them for volatility." Benefits of adopting ED 5 that were cited by S&P, in addition to enhanced consistency and transparency, include better understanding of the risks to which insurers are exposed, and their potential rewards; more informed company managements and boards; better alignment of product pricing and financial reporting; and regulatory benefits, possibly even reduced regulatory filings and requirements. We are grateful to Standard & Poor's for allowing us to make their report available on IASPlus. Click to download:
10 September 2003: Australia should not modify IFRS for domestic use
The Australian Accounting Standards Board has recently begun a programme to adopt International Financial Reporting Standards as Australian GAAP. But the AASB has indicated that it might make some modifications to IFRS for use in Australia. The AASB invited comments on that approach. In a story titled "Keep Global Rules Intact, Say Big Four", the Melbourne Age newspaper Reports (PDF 97k) that responses to the AASB from Deloitte Touche Tohmatsu, PricewaterhouseCoopers, KPMG and Ernst & Young and from senior finance executives of listed companies have said that "the AASB should adopt the international literature without local modifications". Also, the AASB has Announced (PDF 157k) that it will not adopt the Australian "equlivalents" of IFRS in phases, as previously announced, but instead will adopt all of them in a single batch, most likely in April 2004.
9 September 2003: Irish Institute urges IFRS for all domestic companies
The Institute of Chartered Accountants in Ireland has recommended to the Irish government that IFRS be required for "all companies in the Republic with a three-year transitional period to be applied to facilitate the changeover". Click for Press Release (PDF 36k).
9 September 2003: Accountancy Age focus on IFRS
The 4 September 2003 issue of Accountancy Age magazine includes a number of articles focusing on the imminent switch to International Financial Reporting Standards in the United Kingdom in particular and in Europe more generally. The articles include:
7 September 2003: Updated statistics on cross-border capital markets
Cross-border capital markets are an important reason why global accounting standards are needed. On our Statistics Page you can view and download various statistics that demonstrate the globalisation of the world's capital markets. We have updated the following statistics in the past several days:
- Number of Companies Listed on 50 Major World Stock Exchanges, with Domestic and Foreign Split (31 July 2003)
- Non-US Companies Listed on New York Stock Exchange (469 companies from 51 countries at 20 August 2003)
- Non-US Companies Listed on NASDAQ Market (342 companies from 37 countries at June 2003)
- Non-US Companies Registered with the SEC (1,319 companies from 59 countries at 31 December 2002)
- Non-UK Companies Listed on London Stock Exchange Main Board and AIM (447 companies from 63 countries at 31 July 2003)
- Comprehensive Global Capital Market Statistics - World Federation of Exchanges Annual Statistical Report 2002
- Link to Fortune 2003 Global 500
- United Nations Conference on Trade and Development World Investment Report 2003
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6 September 2003: Obstacles to good financial reporting
In a recent speech before the American Enterprise Institute, US SEC Commissioner Cynthia A. Glassman made some observations about Obstacles to Good Financial Reporting that, we believe, are equally relevant in an international financial reporting context as in a domestic one. Click to View Commissioner Glassman's Presentation.
5 September 2003: British securities regulator warns companies on IFRS
In a letter to all companies listed on the London Stock Exchange, the Director of Listing of the Financial Services Authority of the United Kingdom issued a stern warning to be prepared to make the change to IFRS. He wrote:
For a company with a reporting date of 31 December 2005, the date of its transition to IFRS will be 1 January 2004. This means such a company will be required to prepare comparative IFRS accounts for 2004....
I am very concerned to learn that many issuers are poorly prepared for these changes....
I appreciate that the timetable is made more difficult, given the fact that not all the relevant standards have been agreed and some have not yet been published. Nevertheless a consequence of not being in a position to adopt IFRS will be that issuers are unable to meet the reporting requirements and deadlines of the listing rules. Failure by issuers to submit preliminary or interim results within the required timescale is likely to result in the suspension of the issuer's securities.
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Click for FSA Press Release (PDF 34k)
5 September 2003: Valuation issues arising from IFRS
The International Valuation Standards Committee (IVSC) has published the September 2003 issue of its Global Valuation Issues Newsletter (PDF 257k). This edition includes a seven-page update on the valuation implications of International Financial Reporting Standards, a discussion of investment performance standards, as well as general global valuation news. Click for More Info about IVSC including a link for downloading the 2003 International Valuation Standards without charge.
4 September 2003: Proposal to extend the scope of IFRS in Denmark
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Denmark is a member of the European Union, and its listed companies will be required to adopt IFRS in their consolidated financial statements starting in 2005. The Danish Parliament has invited public comment on proposed legislation that would:
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- Require the use of IFRS in individual company financial statements if an entity uses IFRS in its consolidated statements.
- Permit non-listed companies to choose to follow IFRS, instead of Danish GAAP, in both their consolidated and individual company statements.
The draft legislation does not include a proposed starting date for use of IFRS in place of Danish GAAP but leaves this for the Minister of Economic and Business Affairs to determine (through an executive order) at a later stage. Danish listed companies are already permitted to use IFRS provided that they also comply with the provisions of the Danish Financial Statements Act.
4 September 2003: IFRIC issues draft interpretation D2
The International Financial Reporting Interpretations Committee has issued Draft Interpretation D2, Changes in Decommissioning, Restoration and Similar Liabilities. Under IAS 37, a provision must be recognised when an asset is acquired if the acquirer is obligated to incur costs for decommissioning, restoration, and similar future activities. The costs are included as part of the cost of the asset. The proposed Interpretation deals with accounting for subsequent changes in the estimated cash flows relating to the provision. The proposed Interpretation concludes, among other things, that decommissioning, restoration, and similar liabilities should be remeasured at each balance sheet date using a current market-assessed discount rate. Comments are due by 3 November 2003. Click for:
1 September 2003: Executive Briefings on ED 5, Insurance Contracts
Deloitte Touche Tohmatsu has published three Executive Briefings on IASB Exposure Draft ED 5, Insurance Contracts:
1 September 2003: Survey of assumptions used for employee benefit calculations
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Deloitte & Touche (USA) has published its annual Survey of Economic Assumptions Used for SFAS No. 87 and SFAS No. 106 Purposes. Those two FASB Standards require the use of discount rates and other assumptions in measuring an entity's obligations under pension plans (SFAS 87) and other post-employment benefit plans (SFAS 106). IAS 19, Employee Benefits, contains similar requirements. This survey reports on the disclosures made by 287 companies about their SFAS 87 and SFAS 106 assumptions. Click to Download the Report (PDF 121k). |
1 September 2003: New Accounting Roundup newsletter is available
We have posted the 25 August 2003 Edition of Accounting Roundup from Deloitte & Touche (USA). Topics covered include updates on recent FASB and SEC activity, a brief summary of the IASB's macro hedging exposure draft, and an overview of the Deloitte & Touche 2003 Survey of Economic Assumptions Used for SFAS No. 87 [pensions] and SFAS No. 106 [other post-employment benefit] Purposes.
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