July

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European Commission debates IFRS today and tomorrow

15 Jul 2003

The recognition of IFRS for financial reporting by listed companies in Europe will be discussed by two key European Commission groups that are meeting in Brussels over the next several days – the EU Council of Finance Ministers and the EU Accounting Regulatory Committee: At their meeting on 15 and 16 July, the EU Council of Finance Ministers (ECOFIN) will discuss implementation measures for the IAS Regulation 1606/2002 adopted by the European Union in June 2002. The Background Paper (PDF 159k) notes that the Council will have an exchange of views on the implementation of Regulation 1606/2002 at the request of the French delegation.

France has recently circulated a paper setting out what it considers to be problematic issues with regard to IAS 32 and 39. A press conference will be held following the ECOFIN meeting.
  • The second meeting this week will be that of the EC's Accounting Regulatory Committee (ARC), which is charged under the IAS Regulation with "endorsing" IFRS for use in Europe. The ARC has already met several times and meets again on 16 July. While it has not yet made any final implementation decisions on IASB standards, the ECOFIN paper notes that "important issues have been discussed, for example the necessary high quality of translation of all IAS into all EU languages and the question of the quality of IAS 32 and 39 in their current form (which is a topic of interest, especially for banks and insurance companies)".
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    DTT Australian discussion paper on first-time adoption

    14 Jul 2003

    The Australian Accounting Standards Board has embarked on a program to expose and then adopt, over the next 12 months, over 30 Australian Accounting Standards that are intended to be converged with the equivalent IFRS.

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    Seven national accounting standards summaries updated

    11 Jul 2003

    We have updated our summaries of accounting standards activity for the following Asia-Pacific countries: Australia, China, Hong Kong, Japan, Malaysia, New Zealand, and Singapore. .

    We have updated our summaries of accounting standards activity for the following Asia-Pacific countries:

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    We comment on IFRIC D1 on emission rights

    11 Jul 2003

    Deloitte Touche Tohmatsu has submitted a on IFRIC Draft Interpretation D1, Emission Rights (PDF 59k).

    We agree with the general conclusions in the draft Interpretation, particularly that emission rights are intangible assets and not financial assets; receipt of the emission right is a government grant; and emission rights received can not be offset against the liability caused by emitting pollutants. However, as regards the accounting for government grants arising from emission trading schemes, we express some concerns:

    We have concerns as to the effects this interpretation may have on the accounting for government grants not within the scope of this Interpretation. Specifically, the prohibition of the allowed alternatives in IAS 20 because "this would not be a faithful representation of the resources that the entity controls" could be interpreted as a removal of this option from IAS 20. That is, when would an understatement of the assets received as a result of the allowed alternative be a faithful representation? This does highlight an issue with respect to IAS 20, but the issue is not particular to emission rights and should be considered at a wider level. If it is concluded that the options in IAS 20 undermine the quality of financial information reported, IAS 20 should be amended.

    The conclusion by the IFRIC (as directed by the IASB) to prohibit options in a Standard creates confusion as to the role of the IFRIC. We understand the mandate of the IFRIC allows it to set new standards and interpret existing standards. However, this decision apparently allows (and encourages) the IFRIC to take on its own improvements project – a result we do not support.

    We also understand the IASB has two projects (IAS 20 and IAS 38) that could, when finalised, potentially amend the requirements of this Interpretation. As a general matter, we question whether the IFRIC should interpret a Standard the IASB intends to replace or withdraw in the near term.

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    Views from SEC people on international issues

    10 Jul 2003

    Three recent presentations by representatives of the US SEC – one by an SEC Commissioner and two by the Acting Director of the SEC's Office of International Affairs – focus on international issues, particularly international concerns about accounting reforms and regulation in the US.

    You can view or download these presentations from the SEC's website:

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    IFAC publishes its 2002 annual report

    10 Jul 2003

    The International Federation of Accountants (IFAC) has published its 2002 Annual Report (PDF 597k).

    Interestingly, in previous years, IFAC had prepared its financial statements in accordance with IFRS. However, IFAC has now determined that preparation in accordance with International Public Sector Accounting Standards is more appropriate due to the nature of the organisation. Their 2002 report noted: "There has been no substantive difference in the recognition and measurement of amounts included in IFAC's financial statements resulting from the change of standards applied. However, as a result of some changes on the face of the financial statements, comparative figures have been adjusted to ensure they conform to the disclosure changes made."
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    Two exposure drafts expected soon

    10 Jul 2003

    The IASB is expected to publish two exposure drafts in the next several weeks: .

    The IASB is expected to publish two exposure drafts in the next several weeks:

    • Insurance Contracts – Phase I: This ED will propose guidance for applying existing IFRS to accounting for insurance contracts, addressing such issues as catastrophe and equalisation provisions, loss provisioning, discounting, derivatives and deposit components embedded in insurance contracts, offsetting, policy acquisition costs, accounting policies, and disclosure.
    • Disposal of Non-current Assets and Presentation of Discontinued Operations: This will be the first of several EDs coming out of the IFRS-US GAAP Convergence Project. This ED will address classification, presentation, and measurement of assets held for sale and discontinued operations. The goal is convergence of IFRS and FASB Statement 144.
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    Update on South African GAAP

    09 Jul 2003

    An accounting update for South Africa as of July 2003.

    South African Listed Companies Must Follow IFRS

    The JSE Securities Exchange South Africa (JSE) has approved substantial amendments to its listing rules that will require all companies listed on the exchange to comply with International Financial Reporting Standards (IFRS) for years commencing on or after 1 January 2005. Previously, a company whose primary listing is on the JSE could elect to comply with either South African Statements of Generally Accepted Accounting Practices (SA GAAP) or IFRS.

    Under the amended JSE rules, a JSE GAAP Monitoring Panel will have the authority to sanction listed companies for non-compliance with either SA GAAP or IFRS. Go to: JSE Securities Exchange South Africa Website

    SAICA's Submission to the Ministerial Review Panel

    On 5 December 2002 the Minister of Finance established a panel to review the Draft Accountancy Profession Bill. The general objective of the Panel is to promote the continued integrity of financial markets through the effective regulation of auditors and accountants and the Panel is to make recommendations to the Minister by the end of July 2003. It is expected that the revised Bill will be presented to Cabinet towards the end of the year.

    The Panel has requested all interested parties to comment on its terms of reference and related matters. The terms of reference, inter alia, include the structure of the regulatory framework, auditor rotation, disciplinary procedures for auditors and executive management of companies, accounting standards, etc. SAICA has submitted a comment letter to the Panel where its views on these matters and other related issues are put forward. This comment letter is available on the SAICA website.

    AC 300 Series Opinions

    The Accounting Practices Committee (APC) is revising the process of issuing South African GAAP. As part of this process it intends to remove the AC 300-series Opinions and, where required, replace such Opinions with an AC 500-series Interpretation.

    The AC 300 series were opinions issued by the Accounting Issues Task Force (established by SAICA), in order to provide a forum for timely review of accounting issues that are, or could be subject to divergent, or unsatisfactory treatment in practice. Task force opinions do not override principles established by Generally Accepted Accounting Practice (GAAP) in the AC 100 and 400 series, but offer guidance to preparers, auditors and users of financial statements, thus facilitating the standardization of accounting treatments.The AC 500 series pronouncements will be approved for issue by the Accounting Practices Board and will have the same authority as the AC 100 series Statements of GAAP and AC 400 series Interpretations.Most of the AC 300 series opinions have subsequently been withdrawn and the first two proposed AC 500 series pronouncements are now being exposed for public comment.

    ED 163: Framework for the Preparation and Presentation of Limited Purpose Financial Statements

    The Limited Purpose Financial Reporting Exposure Drafts were prepared for use by entities that qualify in terms of the Financial Reporting Bill (The Bill) to present financial statements that comply with Limited Purpose Financial Reporting Standards (LPFRS).

    The Bill provides, inter alia, for the preparation of financial statements by entities using LPFRS. Entities using LPFRS are hereinafter referred to as 'qualifying entities'. The Bill focuses on the user to determine when LPFRS may be used. Size is not a criterion. Qualifying entities may be large or small.The closing date for comments from the public is 31 October 2003.

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    Apologies – this website was down

    09 Jul 2003

    Due to server problems at PCCW, the company that hosts this website, our site was down for 14 hours today. .

    Due to server problems at PCCW, the company that hosts this website, our site was down for 14 hours today.

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    Reminder about comment deadline on IFRIC D1

    08 Jul 2003

    Comments on IFRIC Draft Interpretation D1, Emission Rights, are due in one week – 14 July 2003. .

    Comments on IFRIC Draft Interpretation D1, Emission Rights, are due in one week – 14 July 2003.

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