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July

Comprehensive report on IASB meeting 23-27 July 2001

28 Jul 2001

We have moved the summary of discussions at the July 2001 IASB meeting to its own page.

Click to go to Summary of IASB's 23-27 July 2001 Meeting. It had originally been presented as several lengthy news items.
Turner, Chief Accountant of the US SEC, has announced that he is leaving the Commission in August. He will join the faculty at Colorado State University where he also will be the Director of the Center for Quality Financial Reporting. Mr. Turner has been the Chief Accountant for the Commission since July 1998. (PDF 31k). Among his commentaries on global accounting standards:

IASB adds first time application of IAS to its agenda

26 Jul 2001

At its meeting yesterday, the Board formally added this project to its technical agenda as a first priority project, after having consulted with the Standards Advisory Council.

The project will include a review of SIC 8. IASB staff made a presentation highlighting the key issues and a proposed approach for the project. Click here for a Summary of the Key Issues. In approving the project, the Board indicated that the issues raised are significant and need to be addressed urgently. The staff expects to present a paper at the September Board meeting as well as the October SAC meeting.

EU Economic and Social Committee endorses IAS for Europe

26 Jul 2001

In response to a request from the European Council, by vote of 97 to one the EU Economic and Social Committee (ESC) has endorsed the Proposal for a Regulation of the European Parliament and of the Council that would adopt IAS in Europe by 2005. ESC concurred with an IAS "endorsement mechanism" in which the Accounting Regulatory Committee, chaired by the Commission and with representatives of all Member States, will play a critical role.

In that regard, ESC said that it "strongly supports the Commission's intention that each IAS will either be adopted or rejected in total. To introduce partial approval or modified versions of IAS would be extremely confusing and would undermine the fundamental decision to use IAS". Click for Full Text of the ESC Report to Council (PDF 27k).

IASB's proposed initial technical agenda

25 Jul 2001

At its meeting with the Standards Advisory Council on 24 July, IASB presented the following as its proposed initial technical agenda: .

At its meeting with the Standards Advisory Council on 24 July, IASB presented the following as its proposed initial technical agenda:

PROPOSED IASB INITIAL TECHNICAL AGENDAAS DISCUSSED WITH SAC 24 JULY 2001

First Priority Projects

Second Priority Projects
  • Impairment
  • Intangible Assets
  • Lease Accounting
  • Research and Development
Research Projects
  • Revaluations
  • Extractive Industries
  • Framework - especially definitions of assets, liabilities, equity, income and expenses.
  • Liabilities and Equity
  • Accounting for SMEs -- whether special guidance was needed for small and medium sized unlisted entities
  • Management Discussion and Analysis - whether IASB should provide guidance on the preparation and presentation of information outside of the normal financial statements.

This summary is based on notes taken by observers at the SAC-IASB meeting and should not be regarded as an official or final summary.

Major changes proposed for SIC

24 Jul 2001

At its meeting with its Standards Advisory Council 23 July, IASB presented a paper that proposed major changes to the structure of the Standing Interpretations Committee (SIC).

SAC comments are noted in italics:

PROPOSED CHANGES TO STANDING INTERPRETATIONS COMMITTEE

Name of committee. SIC will be renamed the International Financial Reporting Issues Committee ('IFRIC'). This would be consistent with the proposed new name of IASB pronouncements, International Financial Reporting Standards and with the new mandate (below).

Name of pronouncements. IFRIC's output would be known as 'Abstracts' rather than 'Interpretations'. This change is consistent with the new mandate and is in line with other standard setters 'interpretative' committees and would aid in convergence. The US EITF and UK UITF both release 'Abstracts'.

Mandate. The scope of the IFRIC's activities would be broadened to allow the IFRIC to address issues beyond interpretations of existing standards. This would allow IFRIC to answer questions that would otherwise be answered ad hoc by external parties, which could lead to divergent practices.

SAC members raised concerns that there would be conflicts between the IASB and the IFRIC agenda's. SAC members also expressed concerns that the new IFRIC would be setting new 'mini-standards' with the same status as IFRS.

IFRIC members and chairman. The new IFRIC would have 12 members and a non-voting chairman. This would allow the voting members of IFRIC to concentrate on the technical issues while the chairman can deal with the running of the meeting. The chairman would be either an IASB liaison member, senior IASB staff member, or outside party -- most likely to be a senior member of IASB staff.

SAC members expressed concerns over a non-voting chairman. It was also proposed that the Big 5 firms should all have a permanent seat on IFRIC as they see the practical issues daily.

Procedures. The following procedural issues are set out in the draft paper:
  • An IFRIC agenda committee will make recommendations on proposed agenda items. This will increase IFRIC efficiency and work as a screening process for issues submitted by the public. Sources of questions posed to the committee will remain confidential. The agenda committee will make recommendations on an agenda, but the final decision will be with the IFRIC.
  • IASB will review Draft Abstracts by a process of negative clearance. This would help prevent, at an early stage, the possibility of IFRIC issuing a Draft Abstract to which IASB is opposed.
  • Final approval of an Abstract will be given in a public meeting of the IASB by voting.
Other matters set out in the draft paper
  • There should be a principle-based approach to the guidance to be issued.
  • The proposed IFRIC structure will also have the ability to reconsider a member's membership should they not attend meetings regularly.
  • The proposal makes provision for meeting electronically. These must still be public meetings.
  • Issues where consensus is not reached within 3 meetings will be automatically referred to the Board.
  • Regular IFRIC review of the mandate and operating procedures.
  • The IFRIC will meet every 2 months.

This summary is based on notes taken by observers at the SAC-IASB meeting and should not be regarded as an official or final summary.

Dates of Future Standards Advisory Council meetings announced

24 Jul 2001

16-17 October 2001, Washington, USA 18-19 February 2002, London, UK 17-18 June 2002, Berlin, Germany 21-22 October 2002, London, UK .

  • 16-17 October 2001, Washington, USA
  • 18-19 February 2002, London, UK
  • 17-18 June 2002, Berlin, Germany
  • 21-22 October 2002, London, UK

July 2001 IASPlus newsletter is published

24 Jul 2001

Our July 2001 IASPlus newsletter has 22 pages of news about IASB and International Accounting Standards, including country developments in Asia-Pacific.

Europe-Africa and Americas July editions will be out shortly. Click: (PDF 203k) or More Information and Prior Issues.

Russia may require IAS by 2004

23 Jul 2001

From a story in Business Week, 2 July 2001: .

From a story in Business Week, 2 July 2001:

Putin has proposed several reforms recently that would help banks. He would cut the tax on bank profits from a punitive 43% to 25% and would require businesses to adopt international accounting standards by 2004. More transparent corporate accounts would improve risk control in the banking system by making banks more comfortable handing out corporate loans. And closer supervision would make it harder for undercapitalized banks to circumvent capital-adequacy standards by faking their accounts. But such standards will only be meaningful if the Central Bank monitors risk in the system and sanctions those that don't comply.

EU launches consultation on transparency obligations of public companies

23 Jul 2001

The European Commission has launched an open Internet consultation on the transparency obligations of issuers whose securities are traded on regulated markets.

The consultation document provides first indications of the views of the Commission services as to the possible structure and content of a new regime on disclosure requirements. Disclosure obligations include periodic reporting obligations such as providing annual and interim reports and ongoing disclosure obligations, such reporting changes in major shareholdings or other material information that needs to be published on an ad-hoc basis to prevent market distortions. Click for More Information.

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