March

Adoption of amended EU accounting directives expected this month

12 Mar 2003

We have posted a Progress Report on the EU's Financial Services Action Plan as of 25 February 2003.

Click to download the Progress Report (PDF 48k).

The report notes that 32 measures have been completed, including Regulation (EC)1606/2002 of the European Parliament and of the Council on the Application of International Accounting Standards, adopted on 19 July 2002. The report also notes that a revised Directive modernising the accounting provisions of the 4th and 7th Company Law Directives is "expected to be adopted in March 2003." (click for More Information).

For a comprehensive chronology of progress toward IFRS in the European Union, please Click Here.

 

EFRAG comment letter on ED 2

12 Mar 2003

We have posted the comment letter of the European Financial Reporting Advisory Group to the IASB on ED 2, Share-Based Payment (PDF 122k).

Overall, EFRAG supports the recognition of an expense when goods or services received or acquired in a share-based payment transaction are consumed.

European IFRS regulation will apply to three EEA non-EU countries

11 Mar 2003

The European Economic Area (EEA) was created effective 1994 by an agreement between the EU and three countries -- Iceland, Liechtenstein, and Norway.

The three countries participate in the EU Single Market, while not assuming the full responsibilities of membership of the EU. As such, they must comply with the Accounting Directives and Regulations. We have updated our Table of Use of IFRS to indicate that companies from those countries that are listed in European markets must adopt IFRS starting in 2005, along with EU member countries. There are approximately 60 listed Icelandic companies and 200 listed Norwegian companies.

 

FRB Chairman Alan Greenspan comments on IFRS

10 Mar 2003

In Remarks titled Global Finance: Is It Slowing? delivered via satellite to a symposium in Paris, US Federal Reserve Board Chairman Alan Greenspan said improved international accounting and disclosure standards are needed to make cross-border investing more equitable: As international accounting and reporting standards become better, information asymmetries that currently exist between foreign and domestic investors will diminish.

Adequate disclosure will, one hopes, accompany the development of institutions that will reduce corruption, and improve corporate governance, respect for private property and the rights of minority shareholders....

We must remember that as financial globalisation matures it will have consequences to economies that we cannot ignore. Global capital flows will increase in size and will switch directions more easily. As a result, temporary imbalances will naturally occur from time to time. To counter these, we need to consider various multilateral policy initiatives, from international accounting standards to international capital requirements for banks, from a "New Financial Architecture" to crisis prevention and resolution mechanisms. Also, market participants will need to enhance their ability to manage vast quantities of collateral that are integral to globalised modern finance. Our goals should include not only global financial stability, but also the promotion of free flowing capital directed to its most productive uses throughout the world. That goal will bring about greater financial stability and a more prosperous future for all who choose to participate in the global economy.

FASB chairman tells US Congress about convergence progress

09 Mar 2003

In Testimony (PDF 108k) on 4 March 2003 before a committee of the US House of Representatives, FASB Chairman Robert H.

Herz reported on progress toward convergence of US GAAP and IFRS:

In October 2002, we reached a historic agreement with the IASB to use our best-efforts to align our agendas and, very importantly, to undertake a specific project (with the help and support of the SEC staff) aimed at accelerating the convergence process by trying to eliminate or narrow some of the areas of difference between current US and international standards. Because there are literally hundreds of differences between US and international standards, realistically, this effort will still be ongoing, well beyond 2005 when Europe adopts international standards en masse. But we need to set this process in motion now, so that we can achieve greater progress in this important area going forward. The overall objective of international convergence is not convergence just for the sake of convergence, but rather to arrive at high-quality accounting solutions that improve the transparency of financial reporting in the US and abroad.

Both US and foreign audit firms must register with PCAOB

08 Mar 2003

The new US Public Company Accounting Oversight Board (PCAOB) has voted unanimously (4-0) to issue proposed rules that would require both US and foreign auditing firms to register with the Board if they perform audits of companies registered with the SEC.

Comments are due by 31 March 2003. The rules are consistent with Section 102 of the Sarbanes-Oxley Act, which requires that all auditors of public companies must register with the PCAOB, identify public audit clients, identify all accountants associated with those clients, list fees earned for audit and non-audit services, explain their audit quality control procedures, and identify all criminal, civil, administrative, and disciplinary proceedings against the firm or any of its associated persons in connection with an audit.

The Act also requires the PCAOB to inspect all CPA firms that audit public companies to assess compliance with the law, SEC regulations, rules established by the PCAOB, and professional standards. Following consideration of the comments on its proposed rules, the PCAOB will adopt final rules that also must be approved by the Securities and Exchange Commission.

Click for More Info from PCAOB Website.

 

"IAS Ydinkohdat" – IAS In Your Pocket in Finnish

08 Mar 2003

Deloitte & Touche (Finland) have published "IAS Ydinkohdat", the Finnish version of our popular booklet, IAS In Your Pocket.

This 96-page booklet contains background information about the IASB and IFRS, and summaries of all of the standards with information about possible changes to those standards resulting from current IASB projects. Click here to (PDF 635k).

IASB's public roundtables on IAS 32 and IAS 39 begin Monday

07 Mar 2003

Representatives of 108 firms and organisations will participate in five days of roundtable discussions with the IASB on proposed amendments to the existing International Accounting Standards on financial instruments.

The proposals would require or permit greater use of fair values in measuring financial assets and financial liabilities, plus enhanced disclosures. The current standards are IAS 32, Financial Instruments: Disclosure and Presentation, and IAS 39, Financial Instruments: Recognition and Measurement. The largest concentrations of respondents to the IASB's Proposed Changes come from the banking and insurance sectors. The roundtable discussions will take place on 10 and 11 March in Brussels and on 12, 13, and 14 March in London. A list of the participants, with links to their comment letters to IASB, can be found on IASB's website.

IFAC publishes case studies on the "quality of earnings"

07 Mar 2003

The Financial and Management Accounting Committee of IFAC has issued a new publication designed to educate management, accountants, and other business decision makers about a wide range of issues that impact the quality of earnings.

The Quality of Earnings Case Study Collection includes more than a dozen articles addressing a wide range of issues such as capital market expectations and valuations, estimates/methods, revenue recognition, business combinations, and working capital management. The study can be downloaded without charge from IFAC's IFAC's On-Line Store.

IFRS translation into Dutch is published

07 Mar 2003

A translation of IFRS into Dutch has been completed and is available for purchase.

It is one of a number of translations that are being done in preparation for the implementation of International Financial Reporting Standards in the European Union from 1 January 2005.

Correction list for hyphenation

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