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February

Agenda topics for IASB March meeting

27 Feb 2002

On 19-22 March, IASB will meet at the offices of the Japanese Institute of Certified Public Accountants in Tokyo.

The Technical Agenda includes Business Combinations, First-Time Application of IFRS, Insurance Contracts, Reporting Performance, and Share-Based Payment. On 19 March, the Board will meet in the morning only. Afternoon events are:
  • 13:30-16:00 FASF/IASB Symposium (FASF is Financial Accounting Standards Foundation of Japan)
  • 16:30-18:30 Joint IASB/ASBJ Meeting (ASBJ is Accounting Standards Board of Japan) There is information about Japan's new Accounting Standards Board on our page about Japan.

IASB proposes 'asset ceiling' amendment to IAS 19

25 Feb 2002

IASB has published an exposure draft of a proposed amendment to IAS 19 'Employee Benefits' to prevent a counter-intuitive result produced by the interaction of two aspects of IAS 19 - the option to defer gains and losses in the pension fund and the limit on the amount that can be recognised as an asset (the 'asset ceiling').

Because of the wording of the asset ceiling, a gain is sometimes recognised solely as a result of deferring and amortising an actuarial loss or added past service cost in the current period. Conversely, deferral of actuarial gains sometimes causes a loss to be recognised. The IASB concluded that reporting gains and losses in these circumstances is not appropriate, and the proposed amendment would prevent their recognition.

Comments are due 25 March 2002 -- a 30-day comment period. Click to Download the IASB Press Release (PDF 12k).

 

Project pages updated to reflect February decisions

25 Feb 2002

We have updated our agenda project pages to reflect IASB decisions at its meeting last week on the following projects: Business Combinations, First-Time Application of IFRS, IAS 19 Amendment, IAS 39 Amendments, Improvements Project, Insurance Contracts, Performance Reporting, and Share-Based Payment. .

We have updated our agenda project pages to reflect IASB decisions at its meeting last week on the following projects: Business Combinations, First-Time Application of IFRS, IAS 19 Amendment, IAS 39 Amendments, Improvements Project, Insurance Contracts, Performance Reporting, and Share-Based Payment.

Comment letters on share-based payment and SIC 28-34

23 Feb 2002

IASB has posted letters of comment it has received on: Share-Based Payment SIC Draft Interpretations D28-D34 .

IASB has posted letters of comment it has received on:

Last batch of notes from the 19-22 February IASB meeting

23 Feb 2002

We have posted notes from the third and fourth days of the IASB Meeting on 19-22 February 2002.

Those sessions covered the Improvements Project, specifically issues relating to the true and fair override in IAS 1; amendments to IAS 32 and IAS 39 (particularly derecognition); share-based payment; business combinations (phase I) including some consequential amendments to IAS 36 and IAS 38; and insurance contracts.

SEC Chairman urges 'principles-based accounting standards'

22 Feb 2002

In a speech before the Federal Bar Council, SEC Chairman Harvey L.

Pitt called for a "move toward a principles-based set of accounting standards": [Click for Full Text]

Present-day accounting standards are cumbersome and offer far too detailed prescriptive requirements for companies and their accountants to follow. That approach, by necessity, encourages accountants to 'check the boxes' — that is, to read accounting principles narrowly, to ascertain whether there is technical compliance with applicable accounting principles.

But the first principle should always be the one Judge Henry Friendly articulated four decades ago... If literal compliance with GAAP creates a fraudulent or materially misleading impression in the minds of shareholders, the accountants could, and would, be held criminally liable.

That is why we are advocating fundamental and far-reaching changes in the Financial Accounting Standards Board. We seek to move toward a principles-based set of accounting standards.

Additional notes from the 19-22 February IASB meeting

22 Feb 2002

We have posted notes of the discussion of First-Time Application of IFRS from the second day of the IASB Meeting on 19-22 February 2002. .

We have posted notes of the discussion of First-Time Application of IFRS from the second day of the IASB Meeting on 19-22 February 2002.

Fix 'damaged' financial reporting system: Financial Analysts

22 Feb 2002

The Association for Investment Management and Research has taken full-page ads in the Wall Street Journal and Washington Post with its views on How to Fix a Damaged Financial Reporting System (PDF 259k): For the past 20 years, AIMR has advocated that issuers should not be allowed to tailor transactions to get an accounting treatment that suits them.

We have repeatedly asked for accounting rules that would require issuers to:
  • Report on the balance sheet all assets under their control and all liabilities for which they have responsibility.
  • Explain how and why they use derivatives.
  • Measure and record compensation expense for employee stock options.
  • Recognize all financial assets, liabilities, and derivatives at fair value with changes reported in earnings.
  • Conduct and disclose meaningful market-sensitivity analyses or 'stress tests' so users can forecast potential risks under changing market conditions.
Despite their best efforts to enact such rules, the FASB and SEC succumbed to political pressure and issuers' objections.

Click for AIMR Press Release.

Additional notes from the 19-22 February IASB meeting

21 Feb 2002

We have posted notes from the second day of the IASB Meeting on 19-22 February 2002.

That session covered the Improvements Project, specifically issues relating to IAS 21, discussion of issues raised during the 18-19 February Meeting of SAC, and Performance Reporting.

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FEI testimony criticises FASB, IASB support of JWG proposals

21 Feb 2002

In their Testimony (PDF 84k) before the ongoing US Congressional hearings on "Are Current Financial Accounting Standards Protecting Investors", Financial Executives International called mark-to-market accounting for financial instruments flawed and criticised both FASB and IASB for publishing and "strongly supporting" the Joint Working Group Proposal.

They voiced concerns regarding Enron's recognition in earnings of fair value increases for its energy trading derivatives.

Correction list for hyphenation

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